Section 37 | Consideration chargeable to tax on income.
From legislation.gov.uk
(1)There shall be excluded from the consideration for a disposal of assets taken into account in the computation of the gain any money or money’s worth charged to income tax as income of, or taken into account as a receipt in computing income or profits or gains or losses of, the person making the disposal for the purposes of the Income Tax Acts.
(1A)There is to be excluded from the consideration for a disposal of an asset taken into account in the computation of the gain a sum equal to any amount that is taken into account by the person making the disposal as a receipt under section 96A or 307E of ITTOIA 2005 (capital receipts under, or after leaving, cash basis) as a result of the operation of any deemed disposal provision in relation to the asset.F1
(1B)But subsection (1A) applies only to the extent that the sum has not been excluded from the consideration for an earlier disposal of the asset.F1
(1C)The following are “deemed disposal provisions”—F1
(a)in relation to trades, professions and vocations, subsections (4) and (5) of section 96A of ITTOIA 2005 (which provide for circumstances in which a person is to be regarded as disposing of an asset for the purposes of that section), andF1
(b)in relation to property businesses, section 307F of ITTOIA 2005 (which provides for circumstances in which a person is to be regarded as disposing of an asset for the purposes of section 307E of that Act).F1
(2)Subsection (1) above shall not be taken as excluding from the consideration so taken into account any money or money’s worth which is—F2
(a)taken into account in the making of a balancing charge under the Capital Allowances Act but excluding Part 10 of that Act,F3
(b)brought into account as the disposal value of plant or machinery under Part 2 of that Act, orF3
(c)brought into account as the disposal value of an asset representing qualifying expenditure under Part 6 of that Act.F3
See also section 37A(4) and (5) (consideration on disposal of certain leases).
(2A)Subsection (1) is not to be taken as excluding from the consideration so taken into account any money or money's worth which is, or is taken into account in computing, a return on which income tax is charged under Chapter 2A of Part 4 of ITTOIA 2005 (disguised interest) (but see section 381D of that Act).F4
(3)This section shall not preclude the taking into account in a computation of the gain, as consideration for the disposal of an asset, of the capitalised value of a rentcharge (as in a case where a rentcharge is exchanged for some other asset) or of the capitalised value of a ground annual or feu duty, or of a right of any other description to income or to payments in the nature of income over a period, or to a series of payments in the nature of income.
(4)RepealedF5
(5)If—F6
(a)because section 517G(4) or (6) of ITA 2007 (transactions in land: the chargeable person) applies, an amount is charged to income tax as income of a person other than the person (“A”) by whom the gain was realised, andF6F7
(b)the income tax has been paid,F6
for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of A.
(a)because section 356OG(4) or (6) of CTA 2010 (transactions in land: the chargeable company) applies, an amount is charged to corporation tax as profits of a person other than the person (“C”) by whom the gain was realised, andF6F8F9
(b)the corporation tax has been paid,F6F8
for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of C.
(6)If—F6
(a)because section 777(5) of that Act applies, the person charged to tax under Chapter 4 of Part 13 of that Act (sales of occupation income) is a person other than the person (“B”)—F6
(i)for whom the capital amount was obtained, orF6
(ii)in the case of income treated as arising under section 779 of that Act, by whom the property or right was sold or realised, andF6
(b)the income tax has been paid,F6
for the purposes of this section the amount charged to that tax is regarded as having been charged as the income of B.
(7)In subsection (6) “capital amount” has the same meaning as in Chapter 4 of Part 13 of that Act (sales of occupation income) (see section 777(7) of that Act).F6