23.     Base cost in respect of value shifting arrangement

 

In the case of a disposal by way of a value shifting arrangement-

 

(a)    the base cost of a person’s interest to which paragraph 11(1)(g) applies, is determined in accordance with the formula-

 

Y      =      (A – C)      x      B

                     A

where-

(i)      “Y” represents the amount to be determined;

(ii)     “A” is the market value of that person’s interests immediately prior to the disposal;

(iii)    “B” is the person’s base cost of the interests calculated immediately prior to the disposal; and

(iv)    “C” is the market value of that person’s interests immediately after the disposal.

 

(b)     the base cost of a person-

 

(i)      whose interests increased in value as a result of a value shifting arrangement contemplated in subparagraph (a) is increased by that proportion of the proceeds on disposal contemplated in paragraph 35(2) in respect of the value shifting arrangement which resulted in the increase in market value of that person’s interest; or

(ii)     who acquires a direct or indirect interest in the company, trust or partnership, is that proportion of the proceeds of disposal contemplated in paragraph 35(2) in respect of the value shifting arrangement which resulted in the acquisition of that interest.