GIM5260 - Taxation of the investment return: investment gains: portfolio assets: anti avoidance provisions

Apart from ICTA88/S732 (see GIM5050 above) other anti-avoidance provisions which may apply to portfolio assets on the sale of which a trading profit arises include

• ICTA88/S736 - which operates against dividend stripping and applies where, alone or with connected persons, a company holds 10% or more of a class of shares in another company, and value is stripped out of those shares by means of one or more distributions (see CTM36705 onwards)
• ICTA88/S774 - which may apply where a general insurer gets relief in computing profits for a depreciation in value in a right against an associated non dealing company (for example where unrealised losses are taken into account in a mark to market case) or gets relief for any payment made to such a company, where the other company does not bring the depreciation or payment into account for its own tax purposes. An example might be the writing off of a loan to an associated company where the loan is an asset the profit or loss on which will form part of the computation of trade profits (see CTM36900).