SCHEDULES
F1SCHEDULE 4ADisposal of interest in settled property: deemed disposal of underlying assets
Avoidance of double-counting
10
1
The provisions of this paragraph have effect to prevent there being both a deemed disposal under this Schedule in relation to the disposal of an interest in settled property and a chargeable disposal of the interest itself.
A “chargeable disposal” means one in relation to which section 76(1) does not apply.
2
If there would be a chargeable gain on the disposal of the interest in the settlement, then—
a
if—
i
the chargeable gain on the disposal of the interest would be greater than the net chargeable gain on the deemed disposal, or
ii
there would be no net chargeable gain on the deemed disposal,
the provisions of this Schedule as to a deemed disposal do not apply; and
b
in any other case, the provisions of this Schedule as to a deemed disposal apply and no chargeable gain is treated as accruing on the disposal of the interest in the settlement.
3
If there would be an allowable loss on the disposal of the interest in the settlement, then—
a
if there would be a greater net allowable loss on the deemed disposal, the provisions of this Schedule as to a deemed disposal do not apply; and
b
in any other case, the provisions of this Schedule as to a deemed disposal apply and no allowable loss is treated as accruing on the disposal of the interest in the settlement.
4
If there would be neither a chargeable gain nor an allowable loss on the disposal of the interest in the settlement, then—
a
if there would be a net allowable loss on the deemed disposal, the provisions of this Schedule as to a deemed disposal do not apply; and
b
in any other case, the provisions of this Schedule as to a deemed disposal apply.
5
For the purposes of this paragraph—
a
there is a net chargeable gain on a deemed disposal if the aggregate of the chargeable gains accruing to the trustees in respect of the assets involved exceeds the aggregate of the allowable losses so accruing; and
b
there is a net allowable loss on a deemed disposal if the aggregate of the allowable losses accruing to the trustees in respect of the assets involved exceeds the aggregate of the chargeable gains so accruing.
Sch. 4A inserted (with application in accordance with s. 91(3) of the amending Act) by Finance Act 2000 (c. 17), s. 91(2), Sch. 24