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Paragraph 17 Business asset disposal relief: exchanges of securities etc before 30 October 2024

United Kingdom

(1)

This paragraph applies for the purposes of an election under section 169Q of TCGA 1992 in relation to an exchange of shares or securities within section 135(1) of TCGA 1992 where—

(a)

the exchange takes place on or after 6 April 2023 but before 30 October 2024, and

(b)

the election is made on or after 30 October 2024.

(2)

If condition A or B is met, the disposal of the original shares is to be treated as taking place at the time of the election and not at the time of the exchange.

(3)

Condition A is that—

(a)

the persons who hold shares or securities in company B immediately after the exchange are substantially the same as those who held shares or securities in company A immediately before the exchange, or

(b)

the persons who have control of company B immediately after the exchange are substantially the same as those who had control of company A immediately before the exchange,

and, for the purposes of paragraph (a), connected persons are to be treated as the same person.

(4)

Condition B is that—

(a)

the shareholders who, immediately before and after the exchange, hold shares or securities in company A and company B respectively hold a greater percentage of the ordinary share capital in company B immediately after the exchange than they held in company A immediately before the exchange, and

(b)

as at 30 October 2024—

(i)

company B is the relevant individual’s personal company and is either a trading company or the holding company of a trading group, and

(ii)

the relevant individual is an officer or employee of company B or (if company B is a member of a trading group) of one or more companies which are members of the trading group.

(5)

For this purpose “the relevant individual” means—

(a)

where a claim under section 169M of TCGA 1992 is made jointly by the trustees of a settlement and a qualifying beneficiary, the qualifying beneficiary, and

(b)

where a claim under that section is made by an individual, the individual.

(6)

If, before the exchange, the Commissioners for His Majesty's Revenue and Customs have issued a notification in respect of it under section 138(1) of TCGA 1992 (advance clearance procedure)—

(a)

sections 127 to 131 of that Act apply with the necessary adaptations as if—

(i)

company A and company B were the same company, and

(ii)

the exchange were a reorganisation, and

(b)

section 169Q of that Act applies as if the exchange were treated as a reorganisation by virtue of section 135 of that Act.

(7)

In this paragraph—

  • “company A” and “company B” have the same meanings as in section 135 of TCGA 1992,

  • “holding company” has the same meaning as in section 165 of TCGA 1992 (see section 165A),

  • “the original shares” has the meaning given by section 126 of TCGA 1992, and

  • “trading company” and “trading group” have the meaning given by paragraph 1 of Schedule 7ZA to TCGA 1992.