(1)A member shall be treated for the purposes of the Income Tax Acts and the Gains Tax Acts as absolutely entitled as against the trustees to the assets forming part of an ancillary trust fund of his.
(2)The cost of acquisition and the consideration for the disposal of assets forming part of an ancillary trust fund—
(a)shall be left out of account in computing for the purposes of income tax the profits or losses of the member’s underwriting business; and
(b)accordingly, shall not be excluded for the purposes of capital gains tax under section 37 or 39 of the Gains Tax Act.
(3)None of the following provisions (which apply where an individual entitled to securities dies), namely—
(a)subsections (1) to (4) of section 721 of the Taxes Act 1988 (accrued income scheme);
(b)paragraph 7(2) of Schedule 4 to that Act (deep discount securities);
(c)paragraph 7(1) of Schedule 11 to the [1989 c. 26.] Finance Act 1989 (deep gain securities); and
(d)paragraph 16(1) of Schedule 10 to the [1990 c. 29.] Finance Act 1990 (convertible securities),
shall apply where the individual concerned is a member and the security concerned forms part of an ancillary trust fund of his.
(4)In a case where subsection (3)(a) above applies, the deceased’s personal representatives shall be treated for the purposes of sections 710 to 728 of the Taxes Act 1988 as the transferor or transferee in relation to transfers of securities as to which the deceased was the transferor or transferee (as the case may be) in the interest period in which he died.