Section 440: Market value disposals
1778.This section deals with the situations in which the amount payable on disposal is determined to be the market value. It is based on paragraphs 4, 6, 8 and 9 of Schedule 13 to FA 1996.
1779.In Schedule 13 to FA 1996 these rules importing market values occur in five separate paragraphs but have now been put into this one section. There are now two rules.
1780.Subsection (1) introduces the first rule in which the transfer of a security of a type within subsection (2) is treated as disposed of for an amount equal to its market value at the time of the disposal. This is subject to the second rule, in subsection (4).
1781.Subsection (4) is the second rule. It is a qualification of the first rule and applies for a particular type of transaction. Where a deeply discounted security is converted into shares or other securities the security is instead treated as disposed of for an amount equal to the market value of the shares or securities acquired. But this is subject to a special rule for strips which has been signposted at subsection (5).