Section 99B | Calculation of the disposal cost of accumulation units ^F1

(1)For the purposes of computing the gain accruing on a disposal by a unit holder of units in a unit trust scheme and for the purposes of all other provisions of this Act, an amount shall be treated as expenditure falling within section 38(1)(b) if—

(a)it represents income from the investments subject to the unit trust scheme,

(b)it has been reinvested in respect of the units on behalf of the unit holder (without an issue of new units), and

(c)it is either—

(i)charged to income tax as income of the unit holder (or would be charged to income tax as his income but for a relief which has effect in respect of it) for the purposes of the Income Tax Acts, or

(ii)taken into account as a receipt in calculating profits, gains or losses of the unit holder for the purposes of the Income Tax Acts.

(2)Where an amount is treated as expenditure by virtue of subsection (1), the expenditure shall be treated for the purposes of this Act as having been incurred—

(a)in relation to an authorised unit trust, on the distribution date for the distribution period in respect of which the amount is reinvested, and

(b)in relation to any other unit trust scheme, on the date on which the amount is reinvested.

(3)In subsection (2)(a) “distribution date” and “distribution period” shall have the meaning given by regulations made under section 17(3) of the Finance (No. 2) Act 2005 (as at 1st April 2006, see regulation 15 of the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964)).^F2

(4)Subsection (1) does not apply to disposals in units of an offshore fund that is a transparent fund within the meaning given by regulation 11 of the Offshore Funds (Tax) Regulations 2009 (see instead section 103D).^F3