Income Tax Act 2007 section 809VIA

Application of appropriate mitigation steps where TRF capital involved

Section 809VIA deals with how the "appropriate mitigation steps" rules interact with transitional repatriation facility (TRF) capital within the business investment relief regime, ensuring that TRF capital is identified and treated separately from other disposal proceeds.

• Where a potentially chargeable event would otherwise cause TRF capital to be treated as remitted to the UK after the grace period, special rules apply to separate that TRF capital from other proceeds.
• If the investor disposes of all or part of the holding, the portion of the disposal proceeds equal to the TRF capital amount is treated as being that TRF capital.
• The normal mitigation steps under section 809VI apply only to the non-TRF portion of the disposal proceeds — TRF capital is carved out and handled on its own terms.
• If the mitigation steps succeed in preventing section 809VG(2) from applying, the TRF capital is instead treated as remitted at the time the potentially chargeable event actually occurred, rather than at the end of the grace period.