Income Tax (Trading and Other Income) Act 2005

710 Treatment of shares where annual acquisition limit exceeded

(1) This section sets out the rules for determining which shares whose market value is relevant for the limit in section 709(4) are treated as shares acquired within that limit (“exempt shares”) where that limit is exceeded in a tax year.

(2) Shares are treated as exempt shares so far as their acquisition does not cause the limit to be exceeded at the time they are acquired.

(3) Subsection (2) is subject to subsection (4).

(4) If shares of different descriptions acquired on the same day cause the limit to be exceeded on that day, shares of each description are treated as exempt shares so far as their market value does not exceed the appropriate proportion of the available value.

(5) In subsection (4)—

• “the appropriate proportion”, in relation to shares of a particular description, means the proportion which their market value bears to the market value of all the shares acquired on that day, and

• “available value” means the maximum value of shares which could be acquired on that day without exceeding the limit.