| 170 | CALCULATION OF APPROPRIATE DEDUCTION |
| Introductory | |
| 175 | 16.—(1) Where any of the operative provisions of Part I or Part II of this Schedule requires the appropriate deduction to be made, it shall be construed as requiring the principal amount of levy payable apart from that provision to be reduced by an amount determined in accordance with this Part and Part IV of this Schedule. |
| (2) Where two or more of those provisions are applicable to the same chargeable act or event, they shall have effect cumulatively and the deduction appropriate to each of them shall be made in accordance with the preceding sub-paragraph. | |
| 180 | (3) In this Part and in Part IV of this Schedule any reference to an operative provision of Part I or Part II of this Schedule is a reference to any of the following, that is to say— |
| (a) paragraphs 7, 8, 11, 12 and 13 of this Schedule, and | |
| (b) paragraphs 11, 12 and 13 of this Schedule, as each of those paragraphs has effect by virtue of paragraph 14 of this Schedule. |
| 185 | 17. Where in accordance with paragraph 1, paragraph 2 or paragraph 9 of this Schedule an act or event is taken to constitute or to have constituted a taxable disposal, then in the following provisions of this Schedule, in their application to that taxable disposal,— |
| 190 | (a) 'the taxpayer' means the person or company to whom chargeable gains accrue or accrued on that disposal or would so have accrued if the assumed tax condition had been fulfilled in relation to that disposal; |
| (b) 'the relevant year or period' means the year of assessment or accounting period in which those chargeable gains accrue or accrued or would so have accrued; and | |
| (c) 'tax' means capital gains tax or corporation tax, as the case may be. | |
| 195 | 18.—(1) In this Part of this Schedule 'the increase (if any) in the current use value of the chargeable interest', in relation to a taxable disposal, means the amount (if any) by which the value of the chargeable interest immediately before that disposal, calculated on the assumption specified in sub-paragraph (3) of this paragraph, exceeded the value of that interest at the relevant earlier time, calculated on the like assumption. |
| 200 | (2) For the purposes of the preceding sub-paragraph— |
| 205 | (a) where the gain accruing on the disposal in question, or the gain which would so have accrued if the assumed tax condition had been fulfilled, is, was or would have been treated as a chargeable gain by virtue only of section 17(15) or section 82(3) of the Finance Act 1965, the relevant earlier time is the time immediately after the acquisition of the chargeable interest by the taxpayer, and |
| (b) in any other case, the relevant earlier time is the time of the acquisition of that interest by the taxpayer or 6th April 1965, whichever was the later. | |
| 210 | (3) The assumption referred to in sub-paragraph (1) of this paragraph, in relation to the calculation of value at any time referred to in that sub-paragraph, is that, at any time subsequent to the time in question, planning permission— |
| (a) would be granted for any development of the relevant land which does not constitute material development, but | |
| (b) would not be granted for any development of that land which constitutes material development. | |
| 215 | (4) Sub-paragraphs (1) and (2) of paragraph 4 of Schedule 7 to this Act and (without prejudice to the assumption specified in the last preceding sub- paragraph) paragraph 6 of that Schedule shall have effect for calculating value for the purposes of this paragraph. |
| 220 | (5) For the purposes of the application of this paragraph to a chargeable act or event, the definition of' material development' in section 94(2) of this Act, and any regulations made for the purposes of that definition which are in force at the relevant date, shall be deemed always to have had effect. |
| General provisions for calculating appropriate deduction where assumed tax condition fulfilled | |
| 225 | 19.—(1) For the purpose of assessing levy in respect of a chargeable act or event which fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is fulfilled in relation to the taxable disposal in question, the appropriate deduction (whether required by virtue of Part I or by virtue of Part II of this Schedule) shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph. |
| 230 | (2) There shall be ascertained how much of the tax (if any) to which the taxpayer is or was chargeable for the relevant year or period would not have been so chargeable if any chargeable gain which accrued on that taxable disposal had not accrued. |
| 235 | (3) If the whole or part of any chargeable gain which accrued on the taxable disposal in question was not chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on that gain, or that part of it, as the case may be, if— |
| (a) that gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and | |
| 240 | (b) the whole of that gain, or the whole of that part of that gain, as the case may be, had been chargeable to tax. |
| (4) The appropriate deduction shall then be calculated as follows, that is to say— | |
| 245 | (a) where amounts are ascertained under both of sub-paragraphs (2) and (3) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs; |
| (b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs. |
| 250 | 20.—(1) For the purpose of assessing levy in respect of a chargeable act or event which neither fulfils nor partly fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is fulfilled in relation to the taxable disposal in question, the appropriate deduction required by any provision of Part II of this Schedule shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph. |
| 255 | (2) There shall be ascertained how much of the tax (if any) to which the taxpayer is or was chargeable for the relevant year or period would not have been so chargeable if any chargeable gain accruing on the taxable disposal in question had been limited to the increase (if any) in the current use value of the chargeable interest. |
| 260 | (3) There shall then be ascertained how much of any chargeable gain accruing on the taxable disposal in question would not so have accrued if that gain had been limited as mentioned in sub-paragraph (2) of this paragraph; and the part of that gain which in those circumstances would not have accrued is in the following provisions of this paragraph referred to as 'the excess gain'. |
| 265 | (4) If the whole or part of the excess gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on the excess gain, or that part of it, as the case may be, if— |
| (a) the excess gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and | |
| 270 | (b) the whole of the excess gain, or the whole of that part of it, as the case may be, had been chargeable to tax. |
| (5) The appropriate deduction shall then be calculated as follows, that is to say— | |
| 275 | (a) where amounts are ascertained under both of sub-paragraphs (2) and (4) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs; |
| (a) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs. | |
| General provisions for calculating appropriate deduction where assumed tax condition not fulfilled | |
| 280 | 21.—(1) For the purpose of assessing levy in respect of a chargeable act or event which fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is not fulfilled in relation to the taxable disposal in question, the appropriate deduction (whether required by virtue of Part I or by virtue of Part II of this Schedule) shall, subject to |
| 285 | paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph. |
| 290 | (2) There shall be ascertained how much of the tax (if any) to which the taxpayer would have been chargeable for the relevant year or period if the assumed tax condition had been fulfilled in relation to that disposal would not have been so chargeable if any chargeable gain which, in those circumstances, would have been taken to accrue on that disposal were treated as not having accrued. |
| 295 | (3) If the whole or part of any such chargeable gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on that gain, or that part of it, as the case may be, if— |
| (a) that gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and | |
| (b) the whole of that gain, or the whole of that part of that gain, as the case may be, had been chargeable to tax. | |
| 300 | (4) The appropriate deduction shall then be calculated as follows, that is to say— |
| (a) where amounts are ascertained under both of sub-paragraphs (2) and (3) of this paragraph, it shall be the aggregate of the amounts ascertained under those sub-paragraphs; | |
| 305 | (b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs. |
| 310 | 22.—(1) For the purpose of assessing levy in respect of a chargeable act or event which neither fulfils nor partly fulfils the relevant conditions as to Schedule 5, where the assumed tax condition is not fulfilled in relation to the taxable disposal in question, the appropriate deduction required by any provision of Part II of this Schedule shall, subject to paragraph 24 of this Schedule, be calculated in accordance with the following provisions of this paragraph. |
| 315 | (2) There shall be ascertained how much of the tax (if any) to which the taxpayer would have been chargeable for the relevant year or period if the assumed tax condition had been fulfilled in relation to that disposal would not have been so chargeable if any chargeable gain which, in those circumstances, would have been taken to accrue on that disposal had been limited to the increase (if any) in the current use value of the chargeable interest. |
| 320 | (3) There shall then be ascertained how much of any chargeable gain which, if the assumed tax condition had been fulfilled in relation to that disposal, would have been taken to accrue on it would not have been taken so to accrue if that gain had been limited as mentioned in sub-paragraph (2) of this paragraph; and the part of that gain which in those circumstances would not be taken to have accrued is in the following provisions of this paragraph referred to as 'the excess gain'. |
| 325 | (4) If the whole or part of the excess gain would not have been chargeable to tax in the relevant year or period because of relief for losses accruing in that year or period or in any earlier year or period, there shall be ascertained how much tax would have been chargeable in the relevant year or period on the excess gain, or that part of it, as the case may be, if— |
| 330 | (a) the excess gain, or that part of it, as the case may be, had been the only gain accruing to the taxpayer in the relevant year or period, and |
| (b) the whole of the excess gain, or the whole of that part of it, as the case may be, had been chargeable to tax. | |
| (5) The appropriate deduction shall then be calculated as follows, that is to say— | |
| 335 | (a) where amounts are ascertained under both of sub-paragraphs (2) and (4) of this paragraph, it shall be the aggregate of the amounts ascertained under those subparagraphs; |
| (b) in any other case, it shall be the amount ascertained under one or other of those sub-paragraphs. | |
| Chargeable act or event partly fulfilling relevant conditions as to Schedule 5 | |
| 340 | 23—(1) Where in accordance with any operative provision of Part I or Part II of this Schedule the appropriate deduction is required to be made for the purpose of assessing levy in respect of a chargeable act or event partly fulfilling the relevant conditions as to Schedule 5 (as defined by paragraph 6 of this Schedule), the taxable disposal to which that provision relates (in this paragraph referred to as 'the relevant taxable disposal') shall, for the purposes of this Part of this Schedule, be treated as if it had been two separate taxable disposals, that is to say— |
| 345 | (a) a taxable disposal limited to the part or parts fulfilling the relevant conditions (in this paragraph referred to as 'the first separate disposal'), and |
| 350 | (b) a taxable disposal limited to the remainder of the land in which the chargeable interest subsists (in this paragraph referred to as 'the second separate disposal and |
| (2) If the operative provision in question is paragraph 8, then for the purpose of calculating the appropriate deduction paragraph 19 or, as the case may be, paragraph 21 of this Schedule shall apply as if the taxable disposal which occurred had been the first separate disposal and not the relevant taxable disposal, and accordingly as if— | |
| 355 | (a) in paragraph 19 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which accrued on the taxable disposal in question were a reference to so much of the chargeable gain which accrued on the relevant taxable disposal as is properly attributable to the first separate disposal, and |
| 360 | (b) in paragraph 21 of this Schedule (where that paragraph is applicable) any reference to the chargeable gain which would have been taken to accrue on the taxable disposal in question if the assumed tax condition had been fulfilled in relation to it were a reference to so much of the chargeable gain which in those circumstances would have been taken to accrue on the relevant taxable disposal as is properly attributable to the first separate disposal. |
| 365 | (3) If the operative provision in question is any provision of Part II of this Schedule, then the appropriate deduction shall be the aggregate of two deductions calculated separately as follows, that is to say— |
| (a) a deduction calculated in relation to the first separate disposal in accordance with sub-paragraph (2) of this paragraph, and | |
| 370 | (b) a deduction calculated in relation to the second separate disposal in accordance with the next following sub-paragraph. |
| 375 | (4) For the purpose of calculating the deduction in relation to the second separate disposal, paragraph 20 or, as the case may be, paragraph 22 of this Schedule shall apply as if in that paragraph any reference to any chargeable gain which would have accrued on the taxable disposal in question in any circumstances specified in that paragraph were a reference to so much of any chargeable gain which in those circumstances would have accrued on the relevant taxable disposal as is properly attributable to the second separate disposal. |
| 380 | (5) For the purpose of determining how much of any chargeable gain which accrued, or would in any particular circumstances have accrued, on the relevant taxable disposal if properly attributable to the first separate disposal or the second separate disposal, as mentioned in sub-paragraph (2) of sub-paragraph (4) of this paragraph, that gain shall |
| 385 | be treated as apportioned as between those separate disposals in accordance with the principles applicable to any apportionment required by the provisions of the enactments relating to the tax. |
| Successive chargeable acts or events | |
| 24.—(1) Subject to the following provisions of this paragraph, where— | |
| 390 | (a) in accordance with any operative provision of Part I or Part II of this Schedule the appropriate deduction is required to be made by reference to a taxable disposal (in this paragraph referred to as 'the first taxable disposal') for the purpose of assessing levy in respect of a chargeable act or event (in this paragraph referred to as 'the previous chargeable act or event'), and… |
| 395 | (b) in accordance with any such provision the appropriate deduction is required to be made by reference to another taxable disposal on which chargeable gains accrue or accrued to the same person or company in the same year of assessment or accounting period, or would so have accrued if the assumed tax condition had been fulfilled, and that deduction is so required to be made for the purpose of assessing levy in respect of a subsequent chargeable act or event (in this paragraph referred to as 'the subsequent chargeable act or event'). |
| 400 | any reference in paragraphs 19 to 22 of this Schedule to the tax to which the taxpayer is or was, or would in any specified circumstances have been, chargeable for the relevant year or period shall be construed as a reference to the tax to which the taxpayer would (or would in those circumstances) have been chargeable for the relevant year or period if any chargeable gain which accrued on the first taxable disposal, or would have accrued |
| 405 | on that disposal if the assumed tax condition had been fulfilled, had not or would not have so accrued. |
| (2) Where there is a series of three or more chargeable acts or events, and three or more taxable disposals on which chargeable gains accrue or accrued to the same person or company in the same year of assessment or accounting period or would so have | |
| 410 | accrued if the assumed tax condition had been fulfilled, the preceding sub-paragraph shall have effect in relation to each chargeable act or event of the series successively, so that, for the purpose of assessing levy in respect of each subsequent chargeable act or event, there is excluded from the calculation the chargeable gain which accrues or accrued (or, as the case may be, would have accrued) on any of those taxable disposals |
| 415 | taken into account in calculating the appropriate deduction in relation to a previous chargeable act or event of the series. |
| (3) For the purposes of this paragraph it is immaterial in what order of time any taxable disposals occur, if they occur in the same year of assessment or accounting period. |