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Disposal within the family of business or farm.
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27.—(1) (a) Subject to the provisions of this section, where an individual who has attained the age of fifty-five years, disposes of the whole of his qualifying assets to one or more of his children—
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(i) if the amount or value of the consideration for the disposal does not exceed £150,000, relief shall be given in respect of the full amount of capital gains tax chargeable on any gain accruing on the disposal;
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(ii) if the amount or value of the consideration for the disposal exceeds £150,000, the amount of capital gains tax chargeable on the gain accruing on the disposal shall not exceed half the difference between the amount of that consideration and £150,000.
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(b) For the purposes of paragraph (a), the amount of capital gains tax chargeable in respect of the gain shall be the amount of tax which would not have been chargeable but for that gain.
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(c) In paragraph (a) “children”, in relation to a disposal, includes nephews and nieces who have worked substantially on a full-time basis for the period of 5 years ending with the disposal in carrying on, or assisting in the carrying on of, the trade, business or profession or the work of or connected with the office or employment.
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(2) For the purposes of this section—
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(a) subsections (2) and (3) of section 26 shall apply to a disposal falling within subsection (1) as they apply to a disposal falling within section 26 (1), and
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(b) section 26 (4) shall have effect as if the disposal of qualifying assets in the year of assessment and all years of assessment before such year were disposals of assets owned by the individual at the time of the disposal falling within subsection (1).
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(3) Where assets comprised in a disposal in respect of which relief has been granted under this section are disposed of within ten years of the earlier disposal, section 9 (acquisition and disposal deemed to be at market value) shall not apply to the earlier disposal and, notwithstanding any other provisions in this Act—
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(a) the disposal and acquisition of the assets under that earlier disposal shall be deemed, for the purposes of this Act, to be for such consideration as would have secured that neither a gain nor a loss accrued on that disposal, and
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(b) the acquisition of the assets by the individual making the earlier disposal shall be deemed, for the purposes of this Act, to be the acquisition of the individual making the later disposal:
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Provided that nothing in this subsection shall affect the amount of capital gains tax chargeable in respect of the earlier disposal, but, to the extent that tax so chargeable has been paid, relief shall be granted by set-off against the amount of capital gains tax chargeable on the later disposal and not otherwise.
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(4) An individual who has been granted relief under this section shall not be granted relief under section 26.
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