Withdrawal of exemption for capital gains where asset is converted to stock in trade or shareholding continuity is broken. Exemption from taxation as capital gains is withdrawn where an asset previously not charged as capital gains is converted into or treated as stock-in-trade by the transferee, or where the parent or holding company ceases to hold the whole share capital of the subsidiary within eight years; in such cases the profits or gains are deemed chargeable as capital gains in the tax year the event occurs. Comparable deeming rules apply where prescribed continuity conditions for successor treatment of capital or intangible asset transfers are not complied with, charging the successor entity or relevant shareholder with capital gains.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Withdrawal of exemption for capital gains where asset is converted to stock in trade or shareholding continuity is broken.
Exemption from taxation as capital gains is withdrawn where an asset previously not charged as capital gains is converted into or treated as stock-in-trade by the transferee, or where the parent or holding company ceases to hold the whole share capital of the subsidiary within eight years; in such cases the profits or gains are deemed chargeable as capital gains in the tax year the event occurs. Comparable deeming rules apply where prescribed continuity conditions for successor treatment of capital or intangible asset transfers are not complied with, charging the successor entity or relevant shareholder with capital gains.
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