|
| |
|
(c) | the consideration for the new shares of each description consists wholly |
| |
of old shares of the corresponding description, |
| |
(d) | new shares of each description are issued to the holders of old shares of |
| |
the corresponding description in respect of and in proportion to their |
| |
| 5 |
(e) | by virtue of section 127 of TCGA 1992 as applied by section 135(3) of |
| |
that Act (company reconstructions etc), the exchange of shares is not to |
| |
be treated as involving a disposal of the old shares or an acquisition of |
| |
| |
| In this subsection references to shares, except in the expressions “shares to |
| 10 |
which EIS relief is not attributable” and “subscriber shares”, include securities. |
| |
(2) | For the purposes of this Chapter the exchange of shares is not regarded as |
| |
involving any disposal of the old shares or any acquisition of the new shares. |
| |
| |
(a) | section 136(2) (disposals of new shares), and |
| 15 |
(b) | section 139 (the control and independence requirement), |
| |
| applies in relation to such an exchange of shares, or shares and securities, as is |
| |
mentioned in subsection (1) or, in the case of section 139, arrangements with a |
| |
view to such an exchange. |
| |
(4) | For the purposes of this section old shares and new shares are of a |
| 20 |
corresponding description if, on the assumption that they were shares in the |
| |
same company, they would be of the same class and carry the same rights. |
| |
(5) | References in section 146 to “old shares”, “new shares”, “the old company” and |
| |
“the new company” are to be read in accordance with this section. |
| |
146 | Substitution of new shares for old shares |
| 25 |
(1) | Subsection (2) applies if, in the case of any new shares held by an individual or |
| |
by a nominee for an individual, the old shares for which they were exchanged |
| |
| |
(a) | to which EIS relief was not attributable, and |
| |
(b) | which had been subscribed for by the individual. |
| 30 |
(2) | This Chapter has effect in relation to any subsequent disposal or other event as |
| |
| |
(a) | the new shares had been subscribed for by the individual at the time |
| |
when, and for the amount for which, the old shares were subscribed for |
| |
| 35 |
(b) | the new shares had been issued by the new company at the time when |
| |
the old shares were issued to the individual by the old company, and |
| |
(c) | any requirements of this Chapter which were met at any time before the |
| |
exchange by the old company had been met at that time by the new |
| |
| 40 |
Limits on share loss relief and mixed holdings |
| |
147 | Limits on share loss relief |
| |
(1) | Subsection (2) applies if— |
| |
(a) | an individual disposes of any qualifying shares, |
| |
|
| |
|
| |
|
| |
(i) | form part of a section 104 holding or a 1982 holding at the time of the |
| |
| |
(ii) | formed part of such a holding at an earlier time, and |
| |
(c) | the individual makes a claim under section 132 in respect of a loss incurred on |
| 5 |
| |
(2) | The amount of share loss relief on the disposal is not to exceed the sums that would be |
| |
allowed as deductions in calculating the amount of the loss if the qualifying shares had |
| |
not formed part of the holding. |
| |
(3) | Subsection (4) applies if— |
| 10 |
(a) | an individual disposes of any qualifying shares, |
| |
(b) | the qualifying shares, and other shares that are not capable of being qualifying |
| |
shares, are for the purposes of TCGA 1992 to be treated as acquired by a single |
| |
transaction by virtue of section 105(1)(a) of that Act (disposal of shares |
| |
acquired on same day etc), and |
| 15 |
(c) | the individual makes a claim under section 132 in respect of a loss incurred on |
| |
| |
(4) | The amount of share loss relief on the disposal is not to exceed the sums that would be |
| |
allowed as deductions in calculating the amount of the loss if— |
| |
(a) | the qualifying shares were to be treated as acquired by a single transaction, and |
| 20 |
(b) | the other shares were not to be so treated. |
| |
(5) | Subsection (6) applies if— |
| |
(a) | an individual disposes of any qualifying shares, |
| |
(b) | the qualifying shares (taken as a single asset), and other shares in the same |
| |
company that are not capable of being qualifying shares (taken as a single |
| 25 |
asset), are for the purposes of TCGA 1992 to be treated as the same asset by |
| |
virtue of section 127 of that Act (reorganisation etc treated as not involving |
| |
| |
(c) | the individual makes a claim under section 132 in respect of a loss incurred on |
| |
| 30 |
| References in this subsection and subsection (6) to other shares in the same company |
| |
include debentures of the same company. |
| |
(6) | The amount of share loss relief on the disposal is not to exceed the sums that would be |
| |
allowed as deductions in calculating the amount of the loss if the qualifying shares and |
| |
the other shares in the same company were not to be treated as the same asset. |
| 35 |
| |
“section 104 holding” has the meaning given by section 104(3) of TCGA 1992, |
| |
| |
“1982 holding” has the meaning given by section 109(1) of that Act. |
| |
(8) | For the purposes of this section and section 148, shares to which EIS relief is not |
| 40 |
attributable are not capable of being qualifying shares at any time if— |
| |
(a) | the individual acquired the shares otherwise than by subscription, |
| |
(b) | condition C in section 134(4) was not met in relation to the issue of the |
| |
| |
(c) | condition D in section 134(5) would not be met if the shares were |
| 45 |
disposed of at that time. |
| |
|
| |
|
| |
|
(9) | For the purposes of subsection (5), shares to which EIS relief is not attributable |
| |
are not capable of being qualifying shares at any time if they are shares of a |
| |
different class from the shares mentioned in paragraph (a) of that subsection. |
| |
148 | Disposal of shares forming part of mixed holding |
| |
(1) | This section applies if an individual disposes of shares forming part of a mixed |
| 5 |
holding of shares, that is, a holding of shares in a company which includes— |
| |
(a) | shares that are not capable of being qualifying shares, and |
| |
| |
| |
(a) | whether a disposal by the individual of shares forming part of the |
| 10 |
mixed holding is of qualifying shares, or |
| |
(b) | as to which of any qualifying shares acquired by the individual at |
| |
different times such a disposal relates to, |
| |
| is to be determined as provided by the following provisions of this section. |
| |
(3) | Any such question as is mentioned in subsection (2) is to be determined— |
| 15 |
(a) | except in a case falling within paragraph (b)— |
| |
(i) | in accordance with subsection (4), and |
| |
(ii) | in the case of shares which under that subsection are identified |
| |
with the whole or any part of a section 104 holding or a 1982 |
| |
holding, in accordance with subsection (5), |
| 20 |
(b) | in the case of a mixed holding which includes any of the following— |
| |
(i) | shares issued before 1 January 1994 in respect of which relief |
| |
has been given under Chapter 3 of Part 7 of ICTA (business |
| |
expansion scheme) and has not been withdrawn, |
| |
(ii) | shares to which EIS relief is attributable, and |
| 25 |
(iii) | shares to which deferral relief (within the meaning of Schedule |
| |
5B to TCGA 1992) is attributable, |
| |
| in accordance with subsection (6). |
| |
(4) | For the purposes of subsection (3)(a)(i), the question is to be determined by |
| |
identifying the shares disposed of in accordance with sections 105 to 105B and |
| 30 |
| |
(5) | For the purposes of subsection (3)(a)(ii), the question is to be determined by |
| |
treating the disposal and any previous disposal by the individual out of the |
| |
section 104 or 1982 holding as relating to shares acquired later rather than |
| |
| 35 |
(6) | For the purposes of subsection (3)(b), the question is to be determined— |
| |
(a) | in relation to shares issued before 1 January 1994, as provided by |
| |
subsections (3) to (4C) of section 299 of ICTA (as that section has effect |
| |
in relation to shares so issued), |
| |
(b) | in relation to shares issued on or after that date and before 6 April 2007, |
| 40 |
as provided by subsections (6) to (6D) of that section (as that section has |
| |
effect in relation to shares so issued), and |
| |
(c) | in relation to shares issued on or after 6 April 2007, as provided by |
| |
| |
|
| |
|
| |
|
(7) | Any such question as is mentioned in subsection (2) which cannot be |
| |
determined as provided by subsections (3) to (6) is to be determined on a just |
| |
| |
(8) | In this section “holding” means any number of shares of the same class held by |
| |
one individual in the same capacity, growing or diminishing as shares of that |
| 5 |
class are acquired or disposed of. |
| |
| |
(a) | shares are not to be treated as being of the same class unless they are so |
| |
treated by the practice of a recognised stock exchange or would be so |
| |
treated if dealt in on such an exchange, and |
| 10 |
(b) | subsection (4) of section 104 of TCGA 1992 applies as it applies for the |
| |
purposes of subsection (1) of that section. |
| |
(9) | In this section “section 104 holding” and “1982 holding” have the same |
| |
meaning as in section 147. |
| |
149 | Section 148: supplementary |
| 15 |
(1) | In the case of a disposal of shares within section 148(3)(b)(ii) or (iii) to which |
| |
section 105A of TCGA 1992 (election for alternative treatment: approved- |
| |
| |
(a) | section 299 of ICTA (identification of shares) has effect for the purposes |
| |
of section 148(6)(b), and |
| 20 |
(b) | section 246 of this Act has effect for the purposes of section 148(6)(c), |
| |
| with the same modifications as those with which they have effect for the |
| |
purposes of section 150A(4) of TCGA 1992 (enterprise investment schemes). |
| |
(2) | In a case to which section 127 of TCGA 1992 (reorganisation etc treated as not |
| |
involving disposal) applies (including a case where that section applies by |
| 25 |
virtue of an enactment relating to chargeable gains), shares included in the new |
| |
holding are treated for the purposes of section 148 as acquired when the |
| |
original shares were acquired. |
| |
(3) | Any shares held or disposed of by a nominee or bare trustee for an individual |
| |
are treated for the purposes of section 148 as held or disposed of by that |
| 30 |
| |
(4) | In this section “new holding” and “original shares” have the same meaning as |
| |
in section 127 of TCGA 1992 (or, as the case may be, that section as applied by |
| |
the enactment concerned). |
| |
Miscellaneous and supplementary |
| 35 |
150 | Deemed time of issue for certain shares |
| |
(1) | In this section “the relevant provisions” means— |
| |
| |
section 142(1)(a) and (2)(a), |
| |
| 40 |
| |
| |
|
| |
|
| |
|
(a) | any shares were issued to an individual (“A”) or are treated under |
| |
subsection (3) or this subsection as having been issued to A at a |
| |
| |
(b) | the shares are transferred by A to another individual (“B”) during their |
| |
| 5 |
(c) | A was B’s spouse or civil partner at the time of the transfer, |
| |
| the shares are treated for the purposes of the relevant provisions as having |
| |
been issued to B at the time they were issued to A or are treated as having been |
| |
| |
| 10 |
(a) | any shares (“the original shares”) have been issued to an individual, or |
| |
are treated under subsection (2) or this subsection as having been |
| |
issued to an individual at a particular time, and |
| |
(b) | any corresponding bonus shares are subsequently issued to the |
| |
| 15 |
| the bonus shares are treated for the purposes of the relevant provisions as |
| |
having been issued at the time the original shares were issued to the individual |
| |
or are treated as having been so issued. |
| |
151 | Interpretation of Chapter |
| |
(1) | In this Chapter (subject to subsections (2) to (8))— |
| 20 |
“bonus shares” means shares which are issued otherwise than for |
| |
payment (whether in cash or otherwise), |
| |
“civil partner” refers to one of two civil partners who are living together, |
| |
“corresponding bonus shares”, in relation to any shares, means bonus |
| |
| 25 |
(a) | are issued in respect of those shares, and |
| |
(b) | are in the same company, are of the same class, and carry the |
| |
same rights, as those shares, |
| |
| |
(a) | EIS income tax relief under Part 5 of this Act, and |
| 30 |
(b) | in relation to shares issued after 31 December 1993 and before 6 |
| |
April 2007, relief under Chapter 3 of Part 7 of ICTA (enterprise |
| |
| |
“excluded company” means a company which— |
| |
(a) | has a trade which consists wholly or mainly of dealing in land, |
| 35 |
in commodities or futures or in shares, securities or other |
| |
| |
(b) | has a trade which is not carried on on a commercial basis and in |
| |
such a way that profits in the trade can reasonably be expected |
| |
| 40 |
(c) | is a holding company of a group other than a trading group, or |
| |
(d) | is a building society or a registered industrial and provident |
| |
| |
“group” (except in sections 137 and 142) means a company which has one |
| |
or more 51% subsidiaries together with that or those subsidiaries, |
| 45 |
“holding company” means a company whose business consists wholly or |
| |
mainly in the holding of shares or securities of companies which are its |
| |
| |
|
| |
|
| |
|
“investment company” has the meaning given by section 130 of ICTA |
| |
except that it does not include the holding company of a trading group, |
| |
“qualifying shares” has the meaning given by section 131(2), |
| |
“registered industrial and provident society” means a society registered |
| |
or treated as registered under the Industrial and Provident Societies |
| 5 |
Act 1965 (c. 12) or the Industrial and Provident Societies Act (Northern |
| |
Ireland) 1969 (c. 24 (N.I.)), |
| |
| |
| |
(b) | does not include shares or stock not forming part of a |
| 10 |
company’s ordinary share capital, |
| |
“share loss relief” has the meaning given by section 131(1), |
| |
“spouse” refers to one of two spouses who are living together, |
| |
“trading company” means a company other than an excluded company |
| |
| 15 |
(a) | a company whose business consists wholly or mainly of the |
| |
carrying on of a trade or trades, or |
| |
(b) | the holding company of a trading group, |
| |
“trading group” means a group the business of whose members, when |
| |
taken together, consists wholly or mainly in the carrying on of a trade |
| 20 |
| |
“the year of the loss” has the meaning given by section 131(1). |
| |
(2) | For the purposes of the definition of “corresponding bonus shares” in |
| |
subsection (1), shares are not treated as being of the same class unless they |
| |
would be so treated if dealt in on the Stock Exchange. |
| 25 |
(3) | In section 148(3)(b) and (6) “shares” does not include stock. |
| |
(4) | Except as provided by subsection (5), paragraph (b) of that definition does not |
| |
apply in the definition of “excluded company” in subsection (1) or in sections |
| |
145(1) to (4) and 147(3) to (6), (8) and (9). |
| |
(5) | Paragraph (b) of that definition applies in relation to the expression “shares to |
| 30 |
which EIS relief is not attributable” in section 145(1). |
| |
(6) | The definition of “shares” in subsection (1) does not apply in sections 137(5)(a), |
| |
| |
(7) | For the purposes of the definition of “trading group” in subsection (1), any |
| |
trade carried on by a subsidiary which is an excluded company is treated as not |
| 35 |
| |
(8) | For the purposes of this Chapter a disposal of shares which results in an |
| |
allowable loss for capital gains tax purposes is treated as made at the time |
| |
when the disposal is made or treated as made for the purposes of TCGA 1992. |
| |
|
| |
|
| |
|
| |
Losses from miscellaneous transactions |
| |
Loss relief against miscellaneous income |
| |
152 | Losses from miscellaneous transactions |
| |
(1) | A person may make a claim for loss relief against miscellaneous income if in a |
| 5 |
tax year (“the loss-making year”) the person makes a loss in any relevant |
| |
| |
(2) | A transaction is a relevant one if, assuming there were profits or other income |
| |
| |
(a) | those profits or that other income would be section 950 income, and |
| 10 |
(b) | the person would be liable for income tax charged on those profits or |
| |
| |
(3) | The claim is for the loss to be deducted in calculating the person’s net income |
| |
for the loss-making year and subsequent tax years (see Step 2 of the calculation |
| |
| 15 |
(4) | But a deduction for that purpose is to be made only from the person’s |
| |
| |
(5) | A person’s miscellaneous income is so much of the person’s total income as |
| |
| |
(a) | income or gains arising from transactions, and |
| 20 |
| |
| This is subject to subsection (6). |
| |
(6) | If the loss was made by the person as a partner in a partnership, the |
| |
transactions covered by subsection (5)(a) are limited to transactions entered |
| |
| 25 |
(7) | In calculating a person’s net income for a tax year, deductions under this |
| |
section from the person’s miscellaneous income are to be made before |
| |
deductions of any other reliefs from that miscellaneous income. |
| |
(8) | In this section “section 950 income” means income on which income tax is |
| |
charged under or by virtue of any provision to which section 950 applies. |
| 30 |
(9) | This section needs to be read with— |
| |
(a) | section 153 (how relief works), |
| |
(b) | section 154 (transactions in deposit rights), and |
| |
(c) | section 155 (claims). |
| |
| 35 |
This section explains how the deductions are to be made. |
| |
The amount of the loss to be deducted at any step is limited in accordance with |
| |
| |
| |
| 40 |
Deduct the loss from the miscellaneous income for the loss-making year. |
| |
|
| |
|