835HB Interaction with provisions dealing with chargeable gains.

(1) Subject to this section, section 835C shall apply for the purposes of computing—

(a) the amount of any chargeable gain or allowable loss arising to a supplier on the supply of an asset under an arrangement to which section 835C applies which, for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset, and

(b) in the case of an acquirer of an asset under an arrangement to which section 835C applies, the amount of any consideration for the acquisition of the asset which is taken into account in determining the amount of any gain arising to the person on a subsequent supply of the asset, which for the purposes of the Capital Gains Tax Acts or the Corporation Tax Acts in so far as they apply to chargeable gains, constitutes a disposal of a chargeable asset.

(2) Section 835C shall not apply in computing the amount of any chargeable gain or allowable loss arising to a supplier on the disposal of a chargeable asset under an arrangement where—

(a) the market value of the asset does not exceed €25 million,

(b) the asset is disposed of in circumstances where it is treated for the purposes of corporation tax on chargeable gains or capital gains tax, under—

(i) section 615(2),

(ii) section 617(1),

(iii) section 632(1),

(iv) section 633,

(v) section 633A,

(vi) section 702(2), or

(vii) paragraph 5(2) of Schedule 17,

as having been acquired for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the person making the disposal,

(c) the asset is transferred in the course of a conversion of a building society into a successor company to which paragraph 3(1) of Schedule 16 applies,

(d) section 606(2) applies in relation to the disposal of the asset, or

(e) the asset is disposed of by a person who is an individual to a company and, immediately after its acquisition by the company, the asset is a chargeable asset in relation to that company.

(3) Section 835C shall not apply for the purpose of determining the amount of any consideration for the acquisition of a chargeable asset by an acquirer where—

(a) the market value of the chargeable asset acquired does not exceed €25 million, or

(b) for the purposes of corporation tax on chargeable gains or capital gains tax, under—

(i) any of the provisions mentioned in subparagraphs (i) to (vi) of subsection (2)(b) or paragraph 5(3) of Schedule 17, or

(ii) section 631(3),

the acquirer is treated as if the acquisition of the asset by the person making the disposal had been the acquirer’s acquisition of the asset.

(4) In determining whether, for the purposes of subsection (2)(a) or (3)(a), the market value of an asset (referred to in this subsection as the “first- mentioned asset” ) exceeds €25 million (referred to in this subsection as the “€25 million threshold” ), there shall be added to the market value of that asset the market value of any other asset which—

(a) had at any time formed part of the same asset as the first-mentioned asset, and

(b) as part of a scheme to avoid reaching the €25 million threshold in relation to the first-mentioned asset and the other asset, was supplied or acquired by the supplier and acquirer, as the case may be, under a separate arrangement.

(5) (a) Where—

(i) the gain of a supplier chargeable to tax in relation to the disposal of a chargeable asset is, by virtue of section 835C, computed as if, instead of the actual consideration receivable for the disposal under an arrangement, the arm’s length amount were receivable, and

(ii) the asset is, in relation to the acquirer under the arrangement, a chargeable asset,

then the acquirer shall be treated as having acquired the asset for a consideration equal to the arm’s length amount.

(b) Paragraph (a) shall not apply in relation to an arrangement unless and until any tax due and payable for the chargeable period by the supplier mentioned in paragraph (a)(i) in respect of the disposal, the gain on which was, by virtue of section 835C, computed as if, instead of the actual consideration receivable under the terms of the arrangement, the arm’s length amount were receivable, has been paid.

(6) (a) Where section 835C applies in computing the amount of any chargeable gain or allowable loss arising to the supplier on a disposal of a chargeable asset under an arrangement, or in treating the acquirer as having acquired an asset under an arrangement for a consideration equal to the arm’s length amount then, subject to paragraph (b), this Part shall apply notwithstanding any other provision of Part 19, 20 or 22 or Schedule 14 as to the computation of chargeable gains and allowable losses.

(b) Section 835C shall not apply instead of any other provision of Part 19, 20 or 22 or Schedule 14—

(i) if its application would result—

(I) in the amount of any chargeable gain arising to the supplier on a disposal of a chargeable asset under an arrangement being lower, or

(II) the amount of any allowable loss arising to the supplier on a disposal referred to in clause (I) being higher,

or

(ii) if, by virtue of its application, the acquirer would be treated as having acquired an asset under an arrangement for a consideration that is higher,

than would be the case under the provision or provisions concerned of Part 19, 20 or 22 or Schedule 14.