Section 809VL | Effect of taking appropriate mitigation steps within grace period

(1)This section explains the effect for the purposes of this Chapter in cases where section 809VG(2) does not apply because the appropriate mitigation steps were taken within the grace period allowed for each step.

(2)If disposal proceeds were taken offshore as part of those steps, nothing in section 809VA(2) prevents anything subsequently done in relation to those proceeds (or anything deriving from them) from counting as a remittance of the underlying income or gains to the United Kingdom at the time when the thing is subsequently done.

(3)If disposal proceeds were re-invested as part of those steps—

(a)the underlying income or gains continue to be treated under section 809VA(2) as not remitted to the United Kingdom, and

(b)the business investment provisions apply to the re-investment as they apply to the original investment.

(4)In the application of the business investment provisions to the re-investment—

(a)treat the potentially chargeable event mentioned in section 809VG(1)(b) as the relevant event,

(b)treat the underlying income or gains as the income or gains treated under section 809VA(2) as not remitted to the United Kingdom as a result of the re-investment, and

(c)treat the amount used to make the re-investment as the sum originally invested.

(5)If the re-investment is made using more than the minimum amount of disposal proceeds required to satisfy section 809VI(1) or (2)(b)—

(a)that investment is to be treated as two separate investments, one made using the minimum amount of disposal proceeds and one made using the excess, and

(b)references in the business investment provisions to “the investment” and “the holding” relate only to the investment made using the minimum amount of disposal proceeds.

(6)“The underlying income or gains” means the affected income or gains (within the meaning of section 809VG) or, if one part of the disposal proceeds is taken offshore and the other part re-invested, a corresponding proportion of the affected income or gains.

(7)A further claim must be made in accordance with section 809VA in respect of the re-investment and, if no such claim is made on or before the first anniversary of the 31 January following the tax year in which the re-investment was made, section 809VG(2) applies, as respects the original investment, as if the appropriate mitigation steps had not been taken within the grace period allowed for each step.

(8)Section 809VM makes further provision in cases involving a tax deposit.