3(1)Section 23 of the M1Taxation of Chargeable Gains Act 1992 (receipt of compensation and insurance money not treated as a disposal) shall be amended as follows.U.K.
(2)The following subsections shall be substituted for subsection (6):
“(6)If a building (“the old building”) is destroyed or irreparably damaged, and all or part of a capital sum received by way of compensation for the destruction or damage, or under a policy of insurance of the risk of the destruction or damage, is applied by the recipient in constructing or otherwise acquiring a replacement building situated on other land (“the new building”), then for the purposes of subsections (4) and (5) above each of the old building and the new building shall be regarded as an asset separate from the land on which it is or was situated and the old building shall be treated as lost or destroyed.
(7)For the purposes of subsection (6) above:
(a)references to a building include references to any permanent or semi-permanent structure in the nature of a building; and
(b)the reference to a sum applied in acquiring the new building does not include a reference to a sum applied in acquiring the land on which the new building is situated; and
(c)all necessary apportionments shall be made of any expenditure, compensation or consideration, and the method of apportionment shall be such as is just and reasonable.
(8)This section shall apply in relation to a wasting asset with the following modifications:
(a)paragraphs (b) and (c) of subsection (1) above, and subsection (2) above, shall not apply; and
(b)in subsections (1) and (3) above, the amount of the expenditure from which the deduction is to be made shall be the amount which would have been allowable under Chapter III of this Part if the asset had been disposed of immediately after the application of the capital sum.”
(3)The amendments made by this paragraph shall have effect in relation to capital sums received on or after 6th April 1996.
Marginal Citations