Regulation 99 | Disposals of interests

(1)Subject to paragraph (7), if a participant has an interest in a reporting fund and disposes of the interest, the participant disposes of an asset for the purposes of tax in respect of chargeable gains.^F1

(2)For the purposes of the disposal referred to in paragraph (1), an amount equal to the accumulated undistributed income is treated as expenditure—

(a)given for the acquisition of the asset, and

(b)falling within section 38(1)(a) of TCGA 1992 (acquisition and disposal costs).

(2A)But where regulation 94A has applied, the expenditure given for the acquisition of the asset shall be treated as reduced by an amount equal to the amount of any reduction in the actual distribution under regulation 94A(2).^F2F3

(3)In paragraph (2) the “accumulated undistributed income” means the aggregate of amounts specified in regulation 94 on which the participant has been charged to tax under any of regulations 95 to 98.

(4)The expenditure mentioned in paragraph (2) is treated as incurred, in the case of each amount referred to in paragraph (3), on the fund distribution date for the reporting period in respect of which the amount is treated as distributed.

(5)But if the participant receives an amount in respect of the interest in the reporting fund which is chargeable to income tax, and that amount is received (or treated as received) after the date of the disposal referred to in paragraph (1), the amount is treated as received immediately before that disposal for the purposes of tax in respect of chargeable gains.

(6)This regulation is subject to regulation 17.

(7)This regulation does not apply where section 103D of TCGA 1992 (application of Act to tax transparent funds) applies.^F4