Finance Act, 1996

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Amendment of section 13 (special investment schemes) of Finance Act, 1993.

36.—(1) Section 13 of the Finance Act, 1993 , is hereby amended in subsection (8) by the insertion after paragraph (b) of the following paragraph:

“(bb) (i) Where in a year of assessment (in this paragraph referred to as ‘the first year of assessment’) any securities which are assets subject to any trust created in pursuance of a special investment scheme are disposed of and in the immediately following year of assessment interest becoming payable in respect of the securities is receivable by the special investment scheme, then, for the purposes of computing the chargeable gains for the first year of assessment the price paid by the management company or the trustee for the securities shall be treated as reduced by the appropriate amount in respect of the interest:

Provided that where for a year of assessment the provisions of this paragraph apply so as to reduce the price paid for securities, the amount by which the price paid for the securities is reduced shall be treated as a loss arising, in the immediately following year of assessment, from the disposal of the securities.

(ii) In this paragraph—

‘the appropriate amount in respect of the interest’ means the appropriate amount in respect of the interest which would be determined in accordance with Schedule 11 to the Income Tax Act, 1967 , if the management company or the trustee was the first buyer and the management company or the trustee carried on a trade to which section 368 (1) of the said Act applies:

Provided that in determining the appropriate amount in respect of the interest in accordance with the said Schedule 11, paragraph 3 (4) of that Schedule shall apply as if there were deleted ‘in the opinion of the Appeal Commissioners’;

‘securities’ has the same meaning as in subsection (1) of section 29 of the Finance Act, 1984 .”.

(2) This section shall apply and have effect as respects a disposal on or after the 28th day of March, 1996.