835. Substantial shareholding relief.

Companies can get relief on gains realised on the sale of shares of a trading company with which it holds a substantial shareholding1. This important relief applies only to companies, and is a complete exemption from tax on capital gains (not merely a deferral)2. There is no relief for capital losses, however.

Very generally, a 'substantial shareholding' is a holding of 10% or more of the ordinary shares (with beneficial entitlement of at least 10% of the distributable profits and at least 10% of the assets on winding up) held for a continuous period of 12 months in the six