Part IIIncome Tax, Corporation Tax and Capital Gains Tax

Chapter IGeneral

Securities

96Securities: miscellaneous

1

In section 452(8) of the Taxes Act 1988 (special reserve funds) for the words from “In paragraph (a) above” to the end there shall be substituted—

  • In paragraph (a) above “income” includes—

    1. a

      annual profits or gains chargeable to tax by virtue of section 714(2) or 716(3),

    2. b

      amounts treated as income chargeable to tax by virtue of paragraph 4 of Schedule 4, and

    3. c

      amounts treated as income chargeable to tax by virtue of paragraph 5 of Schedule 11 to the Finance Act 1989.

2

In section 687 of the Taxes Act 1988 (payments under discretionary trusts) the following shall be inserted after subsection (3)(g)—

h

the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 4 of Schedule 4 and is charged to tax at a rate equal to the sum of the basic rate and the additional rate by virtue of paragraph 17 of that Schedule;

i

the amount of any tax on an amount which is treated as income of the trustees by virtue of paragraph 5 of Schedule 11 to the Finance Act 1989 and is charged to tax at a rate equal to the sum of the basic rate and the additional rate by virtue of paragraph 11 of that Schedule;

3

The following subsections shall be inserted at the end of section 132A of the [1979 c. 14.] Capital Gains Tax Act 1979 (deep discount securities)—

5

Where by virtue of paragraph 18(3) of Schedule 4 to the Taxes Act 1988 trustees are deemed for the purposes of that Schedule to dispose of a security at a particular time—

a

they shall be deemed to dispose of the security at that time for the purposes of this Act, and

b

the disposal deemed by paragraph (a) above shall be deemed to be at the market value of the security.

6

Where by virtue of paragraph 18(4) of Schedule 4 to the Taxes Act 1988 trustees are deemed for the purposes of that Schedule to acquire a security at a particular time—

a

they shall be deemed to acquire the security at that time for the purposes of this Act, and

b

the acquisition deemed by paragraph (a) above shall be deemed to be at the market value of the security.

4

The new paragraphs (b) and (c) inserted by subsection (1) above, and subsection (2) above, shall apply—

a

in the case of a deep discount security, where there is a disposal (within the meaning of Schedule 4 to the Taxes Act 1988) on or after 14th March 1989;

b

in the case of a deep gain security, where there is a transfer within the meaning of Schedule 11 to this Act, or a redemption, on or after 14th March 1989.