Income Tax Act 2007

267 Transfers of shares between spouses or civil partners

(1) Section 266 does not apply in the case of any disposal of shares made by an individual to the individual’s spouse or civil partner, if it is made at a time when they are living together.

(2) Subsection (3) applies if any eligible shares which—

(a) have been issued to any individual (“the transferor”), and

(b) are shares by reference to which any VCT relief has been obtained,

are transferred to the transferor’s spouse or civil partner (“the transferee”) by a disposal such as is mentioned in subsection (1).

(3) If this subsection applies, section 266 and subsection (2) have effect, in relation to any subsequent disposal or other event, as if—

(a) the transferee were the person who had subscribed for the shares,

(b) the shares had been issued to the transferee at the time when they were issued to the transferor,

(c) there had been, in relation to the transferred shares, such a reduction by way of VCT relief in the transferee’s liability to income tax as is equal to the actual reduction in respect of those shares of the transferor’s liability, and

(d) that deemed reduction were (despite the transfer) to be treated for the purposes of section 266 as an amount of VCT relief obtained by reference to the shares transferred.

(4) Any assessment for withdrawing or reducing VCT relief because of a disposal or other event falling within subsection (3) is to be made on the transferee.