Commentary

D1.1045 Variations to the date of disposal for the substantial shareholding exemption

Corporate tax
Corporate tax | Commentary

D1.1045 Variations to the date of disposal for the substantial shareholding exemption

Corporate tax | Commentary

Substantial shareholding exemption—Qualifications to other provisions of TCGA 1992

D1.1045 Variations to the date of disposal for the substantial shareholding exemption

References to a disposal include part disposals (as generally for the purpose of TCGA 1992 unless there is specific provision to the contrary1, which there is not in TCGA 1992, Sch 7AC) and deemed disposals. In most cases the date of disposal for the purpose of the substantial shareholding exemption (SSE) is the same as for other capital gains purposes. However, TCGA 1992, Sch 7AC, provides for special timing rules in the case of negligible value claims, degrouping charges under TCGA 1992, s 179 and conditional contracts.

Negligible value claims

In the absence of specific provision to the contrary, where a loss arising on the disposal of a substantial shareholding is not an allowable loss, an investing company could, in the absence of specific legislation, make a negligible value claim under TCGA 1992, s 24(2) and elect under sub-s (2)(b) that a deemed disposal be regarded as having taken place at an earlier time (see C1.321), when perhaps the SSE conditions were not satisfied so as to give an allowable loss.

This tactic is prevented by providing that the back date option under TCGA 1992, s 24(2)(b) is not available2 where a

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