Clause 21

by deleting subsections (3) and (4) and substituting the following subsections:“(3) For the purpose of subsection (2), the cost to the company of acquiring the treasury shares shall be determined by any of the methods referred to in subsection (4), being (if the company has previously been allowed a deduction under this section) the method consistently adopted by it when ascertaining its cost of acquiring shares under this section.(4) The methods referred to in subsection (3) are as follows:

on the basis that the treasury shares acquired by the company at an earlier point in time are deemed to be transferred first;

on the basis of the formulawhere Ais the number of the treasury shares transferred;Bis the total number of treasury shares held by the company immediately before the transfer; andCis the total cost to the company of acquiring the treasury shares held by it immediately before the transfer;

on the basis of the aggregate cost of all treasury shares transferred under subsection (1) within every regular interval in the basis period during which the transfer in question occurred, where the cost of all treasury shares so transferred within a regular interval is ascertained by the formulawhere Dis the total number of treasury shares transferred under subsection (1) within that interval;Eis the total number of treasury shares held by the company at the end of the period equal in length to the regular interval immediately preceding that interval;Fis the total number of treasury shares acquired by the company within that interval;Gis the total cost to the company of acquiring the treasury shares held by it at the end of the period equal in length to the regular interval immediately preceding that interval; andHis the total cost to the company of acquiring treasury shares within that interval.”;”(b)by deleting paragraph (b) of subsection (8) and substituting the following paragraph:“(b)if any amount is paid or payable by the subsidiary company to the holding company for the transfer of the treasury shares, there shall be allowed to the subsidiary company for the year of assessment which relates to the basis period in which the shares are transferred or in which the payment to the holding company for the shares becomes due and payable (whichever is the later), a deduction under subsection (1) of the lower of —

the amount, less any amount paid or payable by the person for the treasury shares, to the extent the amount so paid or payable has not been deducted from the first-mentioned amount; and

an amount equal to the cost to the holding company of acquiring the treasury shares transferred to that person as determined under subsection (8A) less any amount paid or payable by the person for the treasury shares;”; and

by deleting the definition of “regular interval” in subsection (9) and substituting the following definition:“ “regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —

where the aggregate of all of those equal periods is equal to the basis period; and

where the duration of each equal period —

in a case where the company has previously been allowed a deduction under this section, is the one previously adopted by the company for the purpose of this section; or

in any other case, is any duration adopted by the company for the purpose of this section.”.