Article 43 - Replacement of Business Assets

(1) Where a QFC Entity disposes of specified business assets (the "old assets") and the consideration for the disposal is used to acquire other specified business assets (the "new assets"), then on making a claim—
(a) the consideration for the disposal of the old assets shall be treated as if it were an amount to secure that neither a gain nor a loss would accrue to the QFC Entity; and
(b) the consideration for the acquisition of the new assets shall be reduced by the difference between the actual consideration for the disposal of the old assets and the amount the QFC Entity is treated as receiving under Article 43(1)(a).
(2) In this Article a "specified business asset" is an asset meeting all the following conditions—
(a) the asset has been used for the purposes of generating Local Source income; and
(b) it falls within one of the following classes of assets—
(i) a building, part of a building or land;
(ii) goodwill;
(iii) patents, copyrights or any other form of intellectual property.
(3) Where the consideration for the disposal is not fully utilised to acquire new assets, the consideration under Article 43(1)(a) shall be increased by the amount not so utilised.
(4) Where the old assets have not been used for the purposes of generating Local Source income for the whole of their period of Ownership, or have not been used wholly for such purposes, the consideration under Article 43(1)(a) shall be of such an amount to secure that the gain accruing to the QFC Entity is proportionate to the period during which the old assets were not used for generating Local Source income or proportionate to the extent the old assets were not used for generating Local Source income, as the case may be.
(5) This Article only applies where the acquisition of the new assets takes place within the period beginning 6 months before and ending two years after the disposal of the old asset.
Amended (as from 18th June 2014)