C3.1917 CGT reliefs—transfers of shares to employee share ownership trusts (QUESTs)
This rollover relief does not apply to disposals on or after 5 April 2001. However, the relief previously given may be withdrawn and a tax charge arise where a chargeable event occurs (see C3.1918) so the rules for the relief are explained here.
For qualifying disposals prior to 5 April 20011, and subject to the qualifying conditions described below, a taxpayer could claim rollover relief (QUEST rollover relief)2 for gains arising from the disposal of shares to a qualifying employee share ownership trust (generally referred to as a QUEST) where he reinvested the proceeds of the disposal in chargeable assets (see (d) below). The claim had to be made within two years of the acquisition of those replacement assets3.
If the whole of the disposal proceeds were reinvested, the claimant was deemed to have disposed of the shares for a consideration giving rise to no gain/no loss, and the consideration given for the replacement assets was reduced by the excess of the actual disposal consideration over the deemed disposal consideration4.
If only part of the proceeds were reinvested, rollover relief was still available provided that the amount not reinvested was less than the amount of the gain. The gain for this purpose was the full amount of the gain arising, whether or not it was all chargeable. Provided that this condition was met the chargeable gain was limited to the amount not reinvested, and the base cost of the replacement assets for