Q&As

How does TCGA 1992, s 135 (on exchanges of securities) interact with TCGA 1992, s 236H (on employee-ownership trusts (EOTs)) when shares are transferred to an EOT in exchange for loan notes? Is the effect of s 135 that there is no disposal until the loan notes are redeemed, at which point s 236H relief would not be available?

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Published on: 06 September 2017
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Provided that all of the requirements of section 135 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) are met in relation to the sale of the shares to the employee-ownership trust (EOT) trustee, this should have the effect that there is no disposal for capital gains tax (CGT) purposes at the point that the shares are initially sold to the EOT trustee (see TCGA 1992, ss 135(3) and 127). Any CGT charge would

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