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Amendment of Chapter 1 (unit trusts) of Part 27 of Principal Act.
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57.—The Principal Act is amended in Part 27, in Chapter 1—
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(a) by the substitution in subsection (1) of section 737 for the definition of “special investment units” of the following definition:
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“‘special investment units’ means units sold to an individual on or after 1 February 1993 and before 1 January 2001 by the management company or trustee under an authorised unit trust scheme in respect of which—
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(a) the conditions specified in subsection (3) are satisfied, and
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(b) a declaration of the kind specified in subsection (4) has been made to the management company or trustee;”,
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(b) in section 738, in subsection (2) by the substitution for paragraph (b)(i) of the following paragraph:
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“(b) (i) As respects an undertaking for collective investment which is a company, the corporation tax which is chargeable on its profits on which corporation tax falls finally to be borne for a chargeable period shall, for the purposes of the Tax Acts, be such tax before it is reduced by any credit, relief or other reduction under those Acts, computed as if the rate of corporation tax were equal to the standard rate for the year of assessment in which the chargeable period falls.”,
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and
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(c) by the insertion after section 739 of the following section:
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“Reorganisation of undertakings for collective investment.
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739A.— (1) (a) In this section ‘undertaking for collective investment’ has the meaning assigned to it in section 738(1).
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(b) Where an undertaking for collective investment (in this section referred to as the ‘first undertaking’) disposes of assets (in this section referred to as ‘transferred assets’) to another undertaking for collective investment in exchange for the issue of units to the first undertaking by that other undertaking for collective investment, no chargeable gains shall accrue to the first undertaking on that disposal.
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(2) For the purposes of computing a gain accruing to the first undertaking on a disposal or first deemed disposal, under section 738(4)(a)(i), of the units referred to in subsection (1), notwithstanding any other provision of the Capital Gains Tax Acts, the amount or value of the consideration in money or money's worth given by the first undertaking for the acquisition of the units is—
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(a) where the transferred assets fell within section 738(4)(a)(i), the value of the transferred assets on their latest deemed disposal by the first undertaking under that section, and
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(b) where the transferred assets did not fall within section 738(4)(a)(i), the cost incurred by the first mentioned undertaking in acquiring the transferred assets.”.
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