Section 438: Timing of transfers and acquisitions
1771.In most cases it is clear when a disposal occurs. But this section provides a timing rule for transfers and acquisitions where that may be less clear; for example, where the holder of a security enters into an agreement to sell the security to someone else at a future date. The section is based on paragraph 4 of Schedule 13 to FA 1996.
1772.The section provides for the security to be treated as transferred (or acquired) when the agreement for the transfer of the security is made, so long as the person receiving it becomes entitled to it at that time. Where an agreement to transfer a security is conditional, the agreement is treated as made when the condition is satisfied.
1773.The words in brackets in paragraph 4(4) of Schedule 13 to FA 1996 (“whether by the exercise of an option or otherwise”) have been omitted as an unnecessary example.