5(1)The Taxation of Chargeable Gains Act 1992 (c. 12) is amended as follows.
(2)In section 31 (distributions within a group followed by a disposal of shares), for subsection (6)(b) substitute—
“(b)an exchange, or deemed exchange, of shares in or debentures of a company held by company A for shares in or debentures of another company, being a company associated with company A immediately after the transaction, that is treated by virtue of section 135 or 136 as a reorganisation of share capital within the meaning of section 126 to which sections 127 to 131 apply with the necessary adaptations, or”.
(3)In section 34 (transactions treated as a reorganisation of capital)—
(a)in subsections (1)(a), (1A), (1B) and (1C)(a) for “sections 127 and 135(3)” substitute “section 135 or 136”;
(b)in the closing words of subsection (1) for “section 135(3)” substitute “section 135 or 136”; and
(c)in subsection (2) for the words from the beginning to “and in those subsections” substitute “In subsections (1) to (1C)” (the words omitted being unnecessary).
(4)In section 102 (collective investment schemes with property divided into separate parts), in subsection (3)(b) after “135” insert “or 136”.
(5)In section 137 (restriction on application of sections 135 and 136)—
(a)in subsection (1), for “, reconstruction or amalgamation” substitute “or scheme of reconstruction”; and
(b)in subsection (6), for “section 136(3)” substitute “section 135(5), 136(5)”.
(6)In section 138(1) (procedure for clearance in advance), for “, reconstruction or amalgamation” substitute “or scheme of reconstruction”.
(7)In section 139 (reconstruction involving transfer of business), for subsection (9) substitute—
“(9)In this section “scheme of reconstruction” has the same meaning as in section 136.”.
(8)In section 147 (quoted options treated as part of new holdings)—
(a)in subsection (1) for “or amalgamation” substitute “, exchange or scheme of reconstruction”; and
(b)in subsection (2) at the end insert “and “scheme of reconstruction” has the same meaning as in section 136”.
(9)In section 151B (venture capital trusts: supplementary), in subsection (8) for paragraph (c) substitute—
“(c)a reference to the exchanged holding is, in relation to section 135 or 136, to the shares in the company referred to in that section as company A.”.
(10)In section 171(3) (transfers within a group) for “by virtue of sections 127 and 135” substitute “by section 127 as it applies by virtue of section 135”.
(11)In section 211(2)(a) (transfer of long-term business of insurance company), after “scheme of reconstruction” insert “within the meaning of that section”.
(12)In section 251 (debts: general provisions)—
(a)in subsection (2) for “132 and 135” substitute “132, 135 and 136”;
(b)in subsection (3)—
(i)for “132 and 135” substitute “132, 135 and 136”, and
(ii)for “either section 132 or 135” substitute “section 132, 135 or 136”;
(c)in subsection (6)(b) for the words from “unaffected” to the end substitute “to which section 135 applies and which is unaffected by section 137(1)”.
(13)In Schedule A1 (taper relief), in paragraph 18(1)(b) (special rules for assets acquired in the reconstruction of mutual businesses etc) for “subsection (3)” substitute “subsection (2)(a)”.
(14)In Schedule 6 (retirement relief: supplementary provisions), in paragraph 2(2) for “section 135(3)” substitute “section 135 or 136”.