Finance Act 2011

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Amendment of section 817 (schemes to avoid liability to tax under Schedule F) of Principal Act.

28.— (1) Section 817 of the Principal Act is amended in subsection (1)—

(a) in paragraph (ca) by substituting the following for subparagraph (iii)—

“(iii) notwithstanding paragraph (c), not to have been significantly reduced where the gain realised, or the proceeds in either or both money or money’s worth received, by the shareholder on that disposal is or are wholly or mainly attributable to payments or other transfers of value from another company or companies, which is or are controlled (within the meaning of section 432) by that shareholder or by that shareholder and persons connected with him or her, to the close company, and”,

and

(b) by inserting the following after paragraph (d)—

“(e) For the purposes of this section, the holding of money by a company shall be deemed to be a business carried on by the company, regardless of how that money was contributed to, or acquired by, the company.”.

(2) This section has effect as respects any disposal of shares on or after 26 January 2011.