Section 165 | Election to have excluded equity gains and losses included

(1)The filing member of a multinational group may elect that qualifying excluded equity gains or losses of the standard members of the group in a territory are to be treated as not being excluded equity gains or losses for the purposes of section 142.

(2)Excluded equity gains or losses are “qualifying” if

(a)either—^F1

(i)those gains or losses are subject to covered taxes (as taxable gains or allowable losses) in that territory, or^F2

(ii)in the case of gains or losses falling within section 142(2)(a) that are not subject to covered taxes in that territory, gains or losses on the disposal of the qualifying interest in question are subject to covered taxes in that territory , and^F2F3

(b)in the case of gains or losses falling within section 142(2)(b), the gains or losses are not in respect of an interest to which section 142(3) applies.^F3

(3)Paragraph 1 of Schedule 15 (long term elections) applies to an election under subsection (1).

(4)But a revocation of the election under that paragraph does not have effect in relation to equity gains or losses in respect of an ownership interest if—

(a)any member’s adjusted profits have included a loss in respect of that ownership interest as a result of subsection (1), and

(b)that loss would otherwise have been excluded from those profits as a result of section 142(1).

Accordingly, subsection (1) will apply to equity gains and losses in respect of that ownership interest even after the election is revoked.