Finance Act, 1995

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Amendment of section 66 (reduced rate of capital gains tax on certain disposals of shares by individuals) of Finance Act, 1994.

75.— Section 66 of the Finance Act, 1994 , is hereby amended—

(a) in paragraph (a) of subsection (7), by the substitution of “subsections (8) and (8A)” for “subsection (8)”, and

(b) by the insertion of the following subsection after subsection (8):

“(8A) In a case where paragraph (b) of subsection (7) applies and has effect, or would apply and have effect but for the fact that the new holding acquired by the individual does not constitute qualifying shares, and the following conditions are satisfied, that is to say:

(a) the date of the acquisition of the new holding by the individual was on or before the 5th day of April, 1994,

(b) the original shares had been held by the individual throughout the period of 5 years immediately preceding the date of the acquisition of the new holding,

(c) a disposal of the new holding, or a part of that holding, is made by the individual in the year of assessment 1995-96, and

(d) at the time of the disposal of the new holding, or, as the case may be, the part of that holding, the company in which the new holding subsists would not, other than by virtue of this subsection, be treated as a qualifying company in relation to that disposal,

then—

(i) if the disposal by the individual of the new holding or, as the case may be, the part of that holding is not a disposal of qualifying shares, that disposal shall, notwithstanding any other provision of this section, be treated as a disposal of qualifying shares in respect of which the individual's period of ownership is not less than 5 years,

(ii) subsection (2) shall apply—

(I) as if the reference in paragraph (a) of subsection (2) to ‘at the date of acquisition of those shares’ were a reference to ‘at the date of acquisition of the original shares’,

(II) where the company in which the new holding subsists is not the company in which the original shares subsisted, as if the reference in paragraph (a) of subsection (2) to ‘it is’ were a reference to ‘the company in which the original shares subsisted is’,

(III) as if the reference in paragraph (b) of subsection (2) to ‘throughout the specified period’ were a reference to ‘throughout the period of 5 years immediately preceding the date of the acquisition of the new holding’, and

(IV) where the company in which the new holding subsists is not the company in which the original shares subsisted, as if the reference in paragraph (b) of subsection (2) to ‘it is’ were a reference to ‘the company in which the original shares subsisted is’,

and

(iii) subsections (3) and (4) shall apply as if the references therein to ‘throughout the specified period’ were references to ‘throughout the period of 5 years immediately preceding the date of the acquisition of the new holding’.”.