Finance Act, 1990

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Amendment of section 26 (disposal of business or farm on retirement) of Capital Gains Tax Act, 1975 .

84.— Section 26 of the Capital Gains Tax Act, 1975 , is hereby amended—

(a) by the insertion in subsection (3), after “family company”, of “other than a holding company,”,

(b) by the insertion of the following subsection after subsection (3):

“(3A) Where a disposal of qualifying assets includes a disposal of shares or securities of the individual's family company which is a holding company, the amount of the consideration to be taken into account for the purposes of subsection (1) in respect of those shares or securities shall be the proportion of the consideration for such shares or securities which is equal to the proportion which the part of the value of the assets (including cash) of the trading group (excluding shares or securities of one member of the group held by another member of the group) at the time of the disposal which is attributable to the value of the chargeable business assets of the trading group bears to the value of the total assets of the trading group.”,

and

(c) in subsection (6) (a)—

(i) by the insertion, before the definition of “chargeable business asset”, of the following:

“a company shall be deemed to be a ‘100 per cent. subsidiary’ of another company if and so long as not less than 100 per cent. of its ordinary share capital is owned directly or indirectly by that other company;”,

(ii) by the insertion, in the definition of “chargeable business asset”, after “family company” of “or by a company which is a member of a trading group of which the holding company is that individual's family company”,

(iii) by the insertion after the definition of “full-time working director” of the following:

“‘holding company’ means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 100 per cent. subsidiaries;”,

(iv) by the insertion, in the definition of “qualifying assets”, after “family company” of “or a member of a trading group of which the holding company is that individual's family company”, and

(v) by the insertion after the definition of “trading company” of the following:

“‘trading group’ means a group of companies consisting of the holding company and its 100 per cent. subsidiaries, the business of whose members, taken together, consists wholly or mainly of the carrying on of a trade or trades.”.