4(1)This paragraph applies where—
(a)the interest in the offshore fund which is disposed of by the person making a material disposal was acquired by him before 1st January 1984; or
(b)he is treated by virtue of any provision of sub-paragraphs (3) and (4) below as having acquired the interest before that date.
(2)Where this paragraph applies, there shall be determined for the purposes of this Part of this Schedule the amount which would have been the gain on the material disposal—
(a)on the assumption that, on 1st January 1984, the interest was disposed of and immediately reacquired for a consideration equal to its market value at that time; and
(b)subject to that, on the basis that the gain is computed in like manner as, under paragraphs 2 and 3 above, the unindexed gain on the material disposal is determined;
and that amount is in paragraph 5 below referred to as the “post-1983 gain” on the material disposal.
(3)Where the person making the material disposal acquired the interest disposed of—
(a)on or after 1st January 1984, and
(b)in such circumstances that, by virtue of any enactment other than section 86(5) of or Schedule 13 to the [1982 c. 39.] Finance Act 1982 (indexation provisions), he and the person from whom he acquired it (“the previous owner”) fell to be treated for the purposes of the 1979 Act as if his acquisition were for a consideration of such an amount as would secure that, on the disposal under which he acquired it, neither a gain nor a loss accrued to the previous owner,
the previous owner’s acquisition of the interest shall be treated as his acquisition of it.
(4)If the previous owner acquired the interest disposed of on or after 1st January 1984 and in circumstances similar to those referred to in sub-paragraph (3) above, his predecessor’s acquisition of the interest shall be treated for the purposes of this paragraph as the previous owner’s acquisition, and so on back through previous acquisitions in similar circumstances until the first such acquisition before 1st January 1984 or, as the case may be, until an acquisition on a material disposal on or after that date.