Tax effect of ceasing to qualify

This guidance applies to periods of account beginning before 1 January 2005

Where a security ceased to qualify for FA96/S92 treatment, S92(7) stated that there was a deemed disposal and re-acquisition immediately before the date it ceased to qualify.

Relevant consideration

The deemed disposal was for the ‘relevant consideration’. This was the value at which the asset would be carried in the accounts if it had been accounted for at all times in accordance with the authorised accounting method which would be adopted after the re-acquisition (for accounting periods starting on or after 1 January 2005, the amortised cost basis would apply).

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