It's only words

It is common knowledge that Schedule 9 to the Finance Act 1988 (now Schedule 4 to the Taxation of Chargeable Gains Act 1992) provides a 50 per cent relief for certain gains related to transactions between 1 April 1982 and 5 April 1988.
In 1986 our client made a gift of a small number of his private company shares (acquired pre-1982) into a discretionary settlement in anticipation of a takeover of his family company. The net gain on transfer into the settlement was, let us say, £400. Applying the effect of the orthodox understanding of Schedule 9 to the Finance Act 1988 would result in the held-over gain being halved to £200 (the held-over gain).
In 1990, the company was taken over and the trustees received qualifying corporate bonds in exchange of sufficient value to give rise to a deferred gain of, say, £400,000 (the deferred gain).
At least one large firm of accountants felt that, under a certain reading of Schedule 9 to the Finance Act 1988, the 50 per cent relief could alternatively be applied to effectively halve the deferred gain to £200,000.
Faced with the choice of a saving of £200 or £200,000 (at whatever tax rates) it is easy to see why the trustees have acted on the unorthodox understanding of Schedule 9 to the Finance Act 1988.
We would be pleased to learn if any readers have used the unorthodox understanding successfully, if there really is a valid alternative understanding of Schedule 9 to the Finance Act 1988, or any other helpful suggestions in this matter.
(Query T15,703) Halved off.