2In section 164A—
(a)in subsection (1)(a), for the words following “(“the re-investor”)” there is substituted “on any disposal by him of any asset (“the asset disposed of”); and”,
(b)in subsection (2), “Subject to section 164C” is omitted and for “initial holding” (in three places) there is substituted “asset disposed of”,
(c)subsections (3) to (7) are omitted,
(d)in subsection (9), for “initial holding” there is substituted “asset disposed of”, and
(e)for subsection (12) there is substituted—
“(12)Without prejudice to section 52(4), where consideration is given for the acquisition of any assets some of which are shares to the acquisition of which a claim under this section relates and some of which are not, the consideration shall be apportioned in such manner as is just and reasonable”.
3For section 164B there is substituted—
(1)Subject to the following provisions of this section, section 164A shall apply, as it applies in such a case as is mentioned in subsection (1) of that section, where there is—
(a)a disposal by the trustees of a settlement of any asset comprised in any settled property to which this section applies, and
(b)such an acquisition by those trustees of eligible shares in a qualifying company as would for the purposes of that section be an acquisition of a qualifying investment at a time in the qualifying period.
(2)This section applies—
(a)to any settled property in which the interests of the beneficiaries are not interests in possession, if all the beneficiaries are individuals, and
(b)to any settled property in which the interests of the beneficiaries are interests in possession, if any of the beneficiaries are individuals,
and references in this section to individuals include any charity.
(3)If, at the time of the disposal of the asset mentioned in subsection (1)(a) above, the settled property comprising that asset is property to which this section applies by virtue of subsection (2)(b) above but not all the beneficiaries are individuals, then—
(a)only the relevant proportion of the gain which would accrue to the trustees on the disposal shall be taken into account for the purposes of section 164A(2)(a)(i), and
(b)no reduction under section 164A(2) shall be made in respect of the whole or any part of the balance of the gain.
(4)Section 164A shall not apply by virtue of this section in a case where, at the time of the disposal of the asset mentioned in subsection (1)(a) above, the settled property which comprises that asset is property to which this section applies by virtue of subsection (2)(a) above unless, immediately after the acquisition of shares mentioned in subsection (1)(b) above, the settled property comprising the shares is also property to which this section applies by virtue of subsection (2)(a) above.
(5)Section 164A shall not apply by virtue of this section in a case where, at the time of the disposal of the asset mentioned in subsection (1)(a) above, the settled property which comprises that asset is property to which this section applies by virtue of subsection (2)(b) above unless, immediately after the acquisition of shares mentioned in subsection (1)(b) above—
(a)the settled property comprising the shares is also property to which this section applies by virtue of subsection (2)(b) above, and
(b)if not all the beneficiaries are individuals, the relevant proportion is not less than the proportion which was the relevant proportion at the time of the disposal of the asset mentioned in subsection (1)(a) above.
(6)If, at any time, in the case of settled property to which this section applies by virtue of subsection (2)(b) above, both individuals and others have interests in possession, the relevant proportion at that time is the proportion which the amount specified in paragraph (a) below bears to the amount specified in paragraph (b) below, that is—
(a)the total amount of the income of the settled property, being income the interests in which are held by beneficiaries who are individuals, and
(b)the total amount of all the income of the settled property.
(7)Where, in the case of any settled property in which any beneficiary holds an interest in possession, one or more beneficiaries (“the relevant beneficiaries”) hold interests not in possession, this section shall apply as if—
(a)the interests of the relevant beneficiaries were a single interest in possession, and
(b)that interest were held, where all the relevant beneficiaries are individuals, by an individual and, in any other case, by a person who is not an individual.
(8)In this section references to interests in possession do not include interests for a fixed term.”
4Sections 164C to 164E are omitted.
5In section 164H(1), “within the meaning of section 164C” is omitted.
6In section 164L(10), for the words following “trustees or” there is substituted “any individual or charity by virtue of whose interest, at the time of the acquisition, section 164B applies to the settled property”.