Part 4Savings and investment income
C1Chapter 8Profits from deeply discounted securities
Special rules for strips of government securities
447Restriction of profits on strips by reference to original acquisition cost
1
This section applies if—
a
a person makes a profit on the disposal of a strip (apart from this section), and
b
the person's original acquisition cost for the strip (see subsection (4)) exceeds the amount that falls to be brought into account as the amount paid by the person to acquire the strip in determining the amount of the profit.
2
If the amount that falls to be brought into account as the amount payable on the disposal in determining the amount of the profit exceeds the person's original acquisition cost for the strip, the amount of the profit is restricted to that excess.
3
Otherwise the person is treated as not making a profit on the disposal.
4
For the purposes of this section and section 448, a person's original acquisition cost for a strip is the amount that falls to be taken into account as the amount paid by the person to acquire the strip in determining whether the person makes a profit or loss on its disposal if 5th April disposals and acquisitions are ignored.
5
In subsection (4) “5th April disposals and acquisitions” means—
a
disposals under section 445(2) (other than the disposal in question), and
b
acquisitions under section 445(3).
Pt. 4 Ch. 8 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 406(4), 1329(1) (with Sch. 2 Pts. 1, 2)