Section 255E: Reorganisations involving shares to which SI relief is attributable, Taxation of Chargeable Gains Act 1992

Subsection (2) applies if an individual holds shares which form part of the ordinary share capital of a company and include shares of more than one of the following kinds—

shares to which SI relief is attributable and to which subsection (3) applies,

shares to which SI relief is attributable and to which subsection (3) does not apply, and

shares to which SI relief is not attributable and to which subsection (3) does not apply.

If there is a reorganisation within the meaning of section 126 affecting the shares listed in subsection (1), section 127 applies separately to those shares so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding.

This subsection applies to any shares if—

expenditure on the shares has been set under Schedule 8B to this Act against the whole or part of any gain, and

in relation to the shares there has been no chargeable event for the purposes of that Schedule.

If—

an individual holds shares ("the existing holding") which form part of the ordinary share capital of a company,

there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and

immediately following the reorganisation, SI relief is attributable to the existing holding or the allotted shares,

sections 127 to 130 do not apply in relation to the existing holding.

Subject to subsection (6), sections 135 and 136 do not apply in respect of shares to which SI relief is attributable.

Subsection (5) does not have effect to disapply section 135 or 136 in a case where the original shares are shares to which SI relief is attributable if—

the new holding consists of new ordinary shares which meet conditions A and B of section 257L of ITA 2007,

the new shares are issued after the end of three years beginning with the day on which the original shares were acquired,

before issuing the new shares, the company had issued shares which met conditions A and B of section 257L of ITA 2007, and

the company issued a compliance certificate in relation to those earlier shares for the purposes of section 257PA(1) of ITA 2007 and in accordance with sections 257PB and 257PC of ITA 2007.

In subsection (6) "new holding" is to be construed in accordance with sections 126, 127, 135 and 136.

In this section—

"ordinary share capital" has the meaning given in section 989 of ITA 2007;
"ordinary shares", in relation to a company, means shares forming part of its ordinary share capital.

Section 255E: Reorganisations involving shares to which SI relief is attributable

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