Section 108: Identification of relevant securities for corporation tax., Taxation of Chargeable Gains Act 1992

This section has effect for the purposes of corporation tax where any relevant securities are disposed of by a company.

In this section "relevant securities" means—

securities, within the meaning of Chapter 2 of Part 12 of ITA 2007 (accrued income profits);

qualifying corporate bonds;

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ; and

securities which are ... interests in a non-reporting fund, within the meaning of regulations under section 354(1) of TIOPA 2010 (see Part 2 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001));

and shares or securities of a company shall not be treated for the purposes of this section 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 with on a recognised stock exchange.

Where a company disposes of relevant securities, the securities disposed of shall be identified in accordance with the rules contained in this section with the securities of the same class acquired by the company which could be comprised in that disposal, and shall be so identified notwithstanding that they are otherwise identified by the disposal or by a transfer or delivery giving effect to it (but so that where a company disposes of securities in one capacity, they shall not be identified with securities which it holds or can dispose of only in some other capacity).

Relevant securities disposed of on an earlier date shall be identified before securities disposed of on a later date, and the identification of the securities first disposed of shall accordingly determine the securities which could be comprised in the later disposal.

Relevant securities disposed of for transfer or delivery on a particular date or in a particular period—

shall not be identified with securities acquired for transfer or delivery on a later date or in a later period; and

shall be identified with securities acquired for transfer or delivery on or before that date or in or before that period, but on or after the date of the disposal, rather than with securities not so acquired.

The relevant securities disposed of shall be identified—

with securities acquired within the 12 months preceding the disposal rather than with securities not so acquired, and with securities so acquired on an earlier date rather than with securities so acquired on a later date, and

subject to paragraph (a) above, with securities acquired on a later date rather than with securities acquired on an earlier date; and

with securities acquired at different times on any one day in as nearly as may be equal proportions.

The rules contained in the preceding subsections shall have priority according to the order in which they are so contained.

Notwithstanding anything in subsections (3) to (5) above, where, under arrangements designed to postpone the transfer or delivery of relevant securities disposed of, a company by a single bargain acquires securities for transfer or delivery on a particular date or in a particular period and disposes of them for transfer or delivery on a later date or in a later period, then—

the securities disposed of by that bargain shall be identified with the securities thereby acquired; and

securities previously disposed of which, but for the operation of paragraph (a) above in relation to acquisitions for transfer or delivery on the earlier date or in the earlier period, would have been identified with the securities acquired by that bargain—

shall, subject to subsection (3) above, be identified with any available securities acquired for such transfer or delivery (that is to say, any securities so acquired other than securities to which paragraph (a) above applies and other than securities with which securities disposed of for such transfer or delivery would be identified apart from this subsection); and

in so far as they cannot be so identified shall be treated as disposed of for transfer or delivery on the later date, or in the later period, mentioned above.

This section ... shall not apply—

where the disposal is of quoted securities (within the meaning of paragraph 8 of Schedule 2), unless an election has been made with respect to the securities under paragraph 4 of that Schedule or under section 109(4), or

where the disposal is of securities as respects which paragraph 17 or 18 of Schedule 2 has effect.

Section 108: Identification of relevant securities for corporation tax.

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