§ 5.—(1) In this Schedule references to the return from one or more disposals are references to the return on investment represented either—
- (a) by the total net profits and gains arising from the disposal or disposals; or
- (b) by all but an insignificant part of those net profits and gains.
§ (2) For the purposes of the references in sub-paragraph (1) above to the total net profits and gains from any two or more disposals, it shall be assumed that profits and gains realised, and losses sustained, by persons who are associated with each other are all realised or sustained by the same person.
§ (3) For the purposes of sub-paragraph (2) above persons are associated with each other in relation to any two or more disposals made in pursuance of the same scheme or arrangements if—
- (a) each of those persons shares or is to share, to an extent determined for the purposes of or in accordance with the scheme or arrangements, in the net return represented by the aggregate of all the profits, gains and losses realised or sustained on those disposals;
- (b) those persons are associated companies at the time when the last of those disposals is made; or
- (c) those persons have been associated companies at an earlier time falling after the first occasion on which a transaction was entered into in pursuance of the scheme or arrangements.
(4) In this paragraph—
'associated company' shall be construed in accordance with section 416; and
'scheme or arrangements' shall be construed in accordance with paragraph 6(4) below.