Taxation of Chargeable Gains Act 1992 section 116B

Shares beginning or ceasing to be shares to which section 521B of CTA 2009 applies

Section 116B deals with the capital gains consequences when certain shares held by an investing company move into or out of the loan relationships regime under CTA 2009.

• When shares begin or cease to be treated as loan relationships under section 521B of CTA 2009, a deemed disposal and immediate reacquisition occurs at fair value
• The deemed disposal triggers a chargeable gain or allowable loss, calculated by reference to the difference between the original base cost and the fair value at the time of the deemed event
• The gain or loss is brought into the investing company's chargeable gains computation for the accounting period in which the deemed disposal occurs
• The section applies for income tax and capital gains tax purposes from 2009-10 onwards, and for corporation tax purposes for accounting periods ending on or after 1 April 2009