Taxes Consolidation Act 1997 Schedule 20 paragraph 4

Gains since the 6th day of April 1990

Paragraph 4 of Schedule 20 explains how to calculate the offshore income gain on a material disposal where the interest in the offshore fund was acquired (or is treated as having been acquired) before 6 April 1990, by rebasing the acquisition cost to the market value on that date.

• Where an interest in an offshore fund was held before 6 April 1990, the gain is calculated as if the interest had been disposed of and immediately reacquired at its market value on that date, so that only the post-6 April 1990 increase in value is taxed.
• Subject to that rebasing, the gain is computed in the same manner as the unindexed gain under paragraphs 2 and 3 of Schedule 20; the resulting figure is referred to in paragraph 5(2) as "the gain since the 6th day of April, 1990".
• Where the person making the disposal acquired the interest on or after 6 April 1990 in no-gain/no-loss circumstances (other than under section 556(4) indexation-loss provisions), the previous owner's acquisition date and cost are attributed to the current disponer, so the rebasing rule can still apply if the previous owner held the interest before 6 April 1990.
• Where an interest changed hands more than once on a no-gain/no-loss basis, the chain of previous acquisitions is traced back until either the first acquisition before 6 April 1990 is reached or an acquisition on a material disposal on or after that date is identified.