Income Tax Act 2007

147 Limits on share loss relief U.K.

(1) Subsection (2) applies if—

(a) an individual disposes of any qualifying shares,

(b) those shares either—

(i) form part of a section 104 holding F1 ... at the time of the disposal, F2 ...

[F3 (ii) at a time earlier than the time of the disposal but after 5 April 2008 formed part of a section 104 holding, or

(iii) at a time earlier than that time and than 6 April 2008 formed part of an old section 104 holding or a 1982 holding, and]

(c) the individual makes a claim under section 132 in respect of a loss incurred on the disposal.

(2) The amount of share loss relief on the disposal is not to exceed the sums that would be allowed as deductions in calculating the amount of the loss if the qualifying shares had not formed part of the holding.

(3) Subsection (4) applies if—

(a) an individual disposes of any qualifying shares,

(b) the qualifying shares, and other shares that are not capable of being qualifying shares, are for the purposes of TCGA 1992 to be treated as acquired by a single transaction by virtue of section 105(1)(a) of that Act (disposal of shares acquired on same day etc), and

(c) the individual makes a claim under section 132 in respect of a loss incurred on the disposal.

(4) The amount of share loss relief on the disposal is not to exceed the sums that would be allowed as deductions in calculating the amount of the loss if—

(a) the qualifying shares were to be treated as acquired by a single transaction, and

(b) the other shares were not to be so treated.

(5) Subsection (6) applies if—

(a) an individual disposes of any qualifying shares,

(b) the qualifying shares (taken as a single asset), and other shares in the same company that are not capable of being qualifying shares (taken as a single asset), are for the purposes of TCGA 1992 to be treated as the same asset by virtue of section 127 of that Act (reorganisation etc treated as not involving disposal), and

(c) the individual makes a claim under section 132 in respect of a loss incurred on the disposal,

References in this subsection and subsection (6) to other shares in the same company include debentures of the same company.

(6) The amount of share loss relief on the disposal is not to exceed the sums that would be allowed as deductions in calculating the amount of the loss if the qualifying shares and the other shares in the same company were not to be treated as the same asset.

(7) In this section—

• “section 104 holding” has the meaning given by section 104(3) of TCGA 1992 [F4 and “old section 104 holding” is a holding that was a section 104 holding within the meaning of that provision as it applied in relation to disposals before 6 April 2008], and

• “1982 holding” has the meaning given by section 109(1) of that Act [F5 as it applied in relation to disposals before 6 April 2008].

(8) For the purposes of this section and section 148, shares to which EIS relief is not attributable are not capable of being qualifying shares at any time if—

(a) the individual acquired the shares otherwise than by subscription, [F6 or]

(b) condition C in section 134(4) was not met in relation to the issue of the shares, F7 ...

F7 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) For the purposes of subsection (5), shares to which EIS relief is not attributable are not capable of being qualifying shares at any time if they are shares of a different class from the shares mentioned in paragraph (a) of that subsection.

Textual Amendments

F1 Words in s. 147(1)(b)(i) omitted (21.7.2008 with effect in accordance with Sch. 2 para. 100 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 98(2)(a)

F2 Word in s. 147(1)(b)(i) omitted (21.7.2008 with effect in accordance with Sch. 2 para. 100 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 98(2)(a)

F3 S. 147(1)(b)(ii)(iii) substituted (21.7.2008 with effect in accordance with Sch. 2 para. 100 of the amending Act) for s. 147(1)(b)(ii) by Finance Act 2008 (c. 9), Sch. 2 para. 98(2)(b)

F4 Words in s. 147(7) inserted (21.7.2008 with effect in accordance with Sch. 2 para. 100 of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 98(3)(a)

F5 Words in s. 147(7) inserted (21.7.2008 with effect in accordance with Sch. 2 para. 100 of the amending Act) by Finance Act 2008 (c. 9), Sch. 2 para. 98(3)(b)

F6 Word in s. 147(8)(a) inserted (with effect in accordance with s. 38(3) of the amending Act) by Finance Act 2020 (c. 14), s. 38(2)(a)(ii)

F7 S. 147(8)(c) and word omitted (with effect in accordance with s. 38(3) of the amending Act) by virtue of Finance Act 2020 (c. 14), s. 38(2)(a)(ii)