Finance Act, 1982

Amendment of section 9 (consideration) of Capital Gains Tax Act, 1975.

62.Section 9 of the Capital Gains Tax Act, 1975 , is hereby amended by the insertion after subsection (2) of the following subsections:

“(3) Notwithstanding subsection (1) and paragraph 2 (2) of Schedule 2, where, on or after the 24th day of June, 1982, a company, otherwise than by way of a bargain made at arm's length, allots shares in the company (hereafter in this subsection referred to as ‘the new shares’) to a person who is connected with the company, the consideration which the person gives or becomes liable to give for the new shares shall, for the purposes of the Capital Gains Tax Acts, be deemed to be an amount (including a nil amount) equal to the lesser of—

(a) the amount or value of the consideration given by him for the new shares, and

(b) the amount by which the market value of the shares in the company which he held immediately after the allotment of the new shares exceeds the market value of the shares in the company which he held immediately before the allotment or, if he held no such shares immediately before the allotment, the market value of the new shares immediately after the allotment.

(4) In subsection (3) ‘shares’ includes stock, debentures and any interests to which paragraph 5 (2) of Schedule 2 applies and also includes any option in relation to such shares, and references therein to an allotment of shares shall be construed accordingly.”.