Section 236Q — Finance Act 2014: Relief for deemed disposals under section 71

Relief for deemed disposals under section 71 236Q 1 This section applies where—

a a deemed disposal arises under section 71(1) by reason of the trustees of a settlement (“the acquiring settlement”) becoming absolutely entitled to settled property as against the trustee of that settled property (“the transferring trustee”),

b that settled property consists of ordinary share capital of a company, c the relief requirements in section 236H(4)(a) to (d) are met, and d the transferring trustee makes a claim under this section.

2 Section 17(1) (disposals and acquisitions treated as made at market value) does not apply to the disposal.

3 The deemed disposal and acquisition by the transferring trustee under section 71(1) are to be treated for the purposes of this Act as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.

4 For the purposes of section 236P the trustees of the acquiring settlement are treated as acquiring the ordinary share capital from the transferring trustee, at the time of the deemed disposal, in circumstances where section 236H applies.

5 In applying sections 236H(4), 236I to 236P and 236T for the purposes of this section—

a references in those provisions to the settlement are to be read as references to the acquiring settlement, and b references in those provisions to C are to be read as references to the company mentioned in subsection (1)(b).

6 A claim under this section must include—

a information to identify the acquiring settlement, b the name of the company mentioned in subsection (1)(b) and the address of its registered office, and c the date of the deemed disposal and the number of shares deemed to have been disposed of.

7 Section 236R makes provision about events which prevent a claim being made under this section and circumstances in which a claim is revoked.