Details of the Schedule
2.Paragraph 1 introduces the new rules in relation to gifts of qualifying investments to charities by individuals.
3.Paragraph 2 amends section 437 of ITA.
4.Paragraph 2(2) substitutes the term “relevant value” for “market value” in section 437(1) of ITA. This allows for the new rule to adjust the relief due to the donor to the economic cost of the acquisition of the investment by the donor.
5.Paragraph 2(3) inserts three new subsections, (1A) (1B) and (1C), into section 437 of ITA.
6.New subsection (1A) of section 437 of ITA defines the new term “relevant value” as being the market value at the date of disposal of the qualifying investment unless new subsection (1B) applies. Where new subsection (1B) applies, the relevant value is the market value of the gift at the date of disposal or the cost of acquisition to the donor, whichever is the lower.
7.New subsection (1B) of section 437 of ITA sets the conditions for when the relevant value of the qualifying investment (or anything from which it partly or wholly derives) is to be determined by the cost to the donor of its acquisition, rather than by its market value at the date of disposal to the charity:
first, the period between the acquisition of the qualifying investment (or anything from which the qualifying investment derives) and its disposal to a charity must be four years or less;
second, the acquisition must be made as part of a scheme; and
third, the purpose or one of the main purposes of the individual in entering the scheme was to obtain relief or an increased amount of relief.
8.New subsection (1C) of section 437 of ITA defines a scheme for the purposes of new subsection (1B).
9.Paragraph 2(4) applies the provisions of new section 438A of ITA (acquisition value of qualifying investments) to section 437 of ITA.
10.Paragraph 3 inserts new section 438A in ITA.
11.New section 438A defines the acquisition value of a qualifying investment. New subsection (1)(a) provides that where there is no change in the asset disposed of to the charity and the period between acquisition and disposal is four years or less, then the acquisition value is the consideration given by the donor for acquiring the asset. New subsection (1)(b) provides that where the asset disposed of is not exactly the same as the asset initially acquired then the acquisition cost is the just and reasonable proportion of the acquisition cost of the asset initially acquired.
12.New section 438A(2) defines acquisition cost.
13.Paragraph 4 inserts the term “acquisition value of a qualifying investment” in Schedule 4 to ITA (index of defined expressions).
14.Paragraph 5 introduces the new rules in relation to gifts of qualifying investments to charities by companies.
15.Paragraph 6 amends section 209 of CTA.
16.Paragraph 6(2) substitutes the term “relevant value” for “market value” in subsection (1) of section 209 of CTA. This allows for the new rule to adjust the relief due to the donor to the economic cost of the acquisition of the investment by the donor.
17.Paragraph 6(3) inserts three new subsections into section 209 of CTA.
18.New subsection (1A) of section 209 of CTA defines the new term “relevant value” as being the market value at the date of disposal of the qualifying investment unless new subsection (1B) applies. Where new subsection (1B) applies, the relevant value is the market value of the gift at the date of disposal or the cost of acquisition to the donor, whichever is the lower.
19.New subsection (1B) of section 209 of CTA sets the conditions for when the relevant value of the qualifying investment (or anything from which it partly or wholly derives) is to be determined by its value at the time of acquisition rather than by its market value at the date of disposal to the charity:
first, the period between the acquisition of the qualifying investment (or anything from which the qualifying investment derives) and its disposal must be four years or less;
second, the acquisition must be made of part of a scheme; and
third, the purpose or one of the main purposes of the company in entering the scheme was to obtain relief or an increased amount of relief.
20.New subsection 1(C) of section 209 of CTA defines a scheme for the purposes of new subsection 1(B)
21.Paragraph 6(4) applies the provisions of new section 210A of CTA (acquisition value of qualifying investments) to section 209 of CTA.
22.Paragraph 7 inserts new section 210A (acquisition value of qualifying investments) into CTA.
23.Subsection (1) of new section 210A of CTA defines the acquisition value of a qualifying investment for the purposes of section 209 of CTA. New subsection (1)(a) provides that where there is no change in the asset disposed of to the charity and the period between acquisition and disposal is four years or less, then the acquisition value is the consideration given by the donor for acquiring the asset. New subsection (1)(b) provides that where the asset disposed of is not exactly the same as the asset initially acquired then the acquisition cost is the just and reasonable proportion of the acquisition cost of the asset initially acquired.
24.Subsection (2) of new section 210A of CTA defines the cost to the company of acquiring the asset disposed of.
25.Paragraph 8 inserts the term “acquisition value of a qualifying investment” in Schedule 4 to CTA (index of defined expressions).
26.Paragraph 9 applies the provisions in this Schedule to disposals on or after 15 December 2009.
27.Paragraph 10 applies the provisions in this Schedule to section 587B of the Income and Corporation Taxes Act 1988 for the period 15 December 2009 to 3 March 2010, the date CTA came into force.
