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Amendment of section 34 (disposition by or to a company) of Principal Act.
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129.—(1) Section 34 of the Principal Act is hereby amended by the substitution of the following subsections for subsections (1) and (2):
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“(1) For the purposes of this Act—
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(a) consideration paid by, or a disposition made by, a company shall be deemed to be consideration, or a disposition (as the case may be) paid or made, and
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(b) consideration, or a gift, or an inheritance taken by a company shall be deemed to be consideration, or a gift or an inheritance (as the case may be) taken,
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by the beneficial owners of the shares in the company and the beneficial owners of the entitlements under any liability incurred by the company (otherwise than for the purposes of the business of the company, wholly and exclusively) in the same proportions as the specified amounts relating to their respective beneficial interests in the shares and entitlements bear to each other.
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(2) In this section—
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‘company’ means a private company within the meaning of section 16 (2);
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‘market value’ means—
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(a) in the case of a person's beneficial interest in shares and entitlements, the market value of that interest on the date of the payment, disposition, gift or inheritance, as the case may be, ascertained by reference to the market value on that date of the shares and entitlements in which the interest subsists, and
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(b) in the case of a share in which a beneficial interest subsists, the market value of that share ascertained in the manner described in section 16 as if, on the date on which the market value is to be ascertained, it formed an apportioned part of the market value of a group of shares consisting of all the shares in the company issued and outstanding at that date;
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‘share’ has the same meaning as it has in section 16 (as amended by the Finance Act, 1993);
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‘specified amount’, in relation to a person's beneficial interest in shares and entitlements, means—
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(a) in the case of consideration paid, or a disposition made, by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was decreased as a result of the payment of the consideration or the making of the disposition, and
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(b) in the case of consideration, or a gift, or an inheritance taken by the company, a nil amount or, if greater, the amount by which the market value of the beneficial interest was increased as a result of the taking of the consideration, gift or inheritance.”.
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(2) This section shall apply where the date of the payment, disposition, gift, or inheritance, to which subsection (1) relates, is on or after the 24th day of February, 1993.
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