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Finance Act 1989

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This is the original version (as it was originally enacted).

Charge to tax on transfer

5(1)This paragraph applies if—

(a)there is a transfer of a deep gain security on or after 14th March 1989 (irrespective of when the person making the transfer acquired it), and

(b)the amount obtained on transfer exceeds the amount paid on acquisition.

(2)In such a case—

(a)an amount equal to the difference between those two amounts, less the amount of any costs, shall be treated as income of the person making the transfer,

(b)the income shall be chargeable to tax under Case III or Case IV (as the case may be) of Schedule D,

(c)the income shall be treated as arising in the year of assessment in which the transfer takes place, and

(d)notwithstanding anything in sections 64 to 67 of the Taxes Act 1988, the tax shall be computed on the income arising in the year of assessment for which the computation is made.

(3)For the purposes of this paragraph—

(a)the amount obtained on transfer is the amount obtained, in respect of the transfer, by the person making it,

(b)the amount paid on acquisition is the amount paid by that person in respect of his acquisition of the security (or his last acquisition of it before the transfer), and

(c)costs are the costs incurred by that person in connection with the transfer and with his acquisition of the security (or his last acquisition of it before the transfer).

(4)For the purposes of sub-paragraph (3)(a) above the person making the transfer shall be treated as obtaining in respect of it—

(a)any amount he actually obtains in respect of it, and

(b)any amount he is entitled to obtain, but does not obtain, in respect of it.

(5)Sub-paragraph (4) above shall not apply where paragraph 7, 8 or 9 below applies.

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