PART VII GENERAL PROVISIONS RELATING TO TAXATION OF INCOME OF INDIVIDUALS
C1CHAPTER III RELIEF FOR INVESTMENT IN CORPORATE TRADES: THE BUSINESS EXPANSION SCHEME
C2299 Disposal of shares.
1
M1Where an individual disposes of any eligible shares before the end of the relevant period, then—
a
if the disposal is otherwise than by way of a bargain made at arm’s length, he shall not be entitled to any relief in respect of those shares; and
b
in any other case, the amount of relief to which he is entitled in respect of those shares shall be reduced by the amount or value of the consideration which he receives for them.
2
M2Where after 18th March 1986 an option, the exercise of which would bind the grantor to purchase any shares, is granted to an individual during the relevant period, the individual shall not be entitled to any relief in respect of the shares to which the option relates.
3
M3Where an individual holds ordinary shares of any class in a company and the relief has been given (and not withdrawn) in respect of some shares of that class but not others, any disposal by him of ordinary shares of that class in the company, and any option of the kind mentioned in subsection (2) above, shall be treated for the purposes of this section as relating—
a
first, to those (if any) in respect of which relief has been given (and not withdrawn) under Chapter II of Part IV of the Finance Act 1981 rather than to others; and
b
then, to those in respect of which relief has been given (and not withdrawn) under this Chapter (or Schedule 5 to the Finance Act 1983).
4
M4Where the relief has been given (and not withdrawn) to an individual in respect of shares of any class in a company which have been issued to him at different times, any disposal by him of shares of that class shall, subject to subsection (3) above, be treated for the purposes of this section as relating to those issued earlier rather than to those issued later.
5
M5Where shares in respect of which the relief was given have by virtue of any such allotment as is mentioned in section F1126(2)(a) of the 1992 Act (not being an allotment for payment) fallen to be treated under section F1127 of that Act as the same asset as a new holding—
a
a disposal of the whole or part of the new holding shall be treated for the purposes of this section as a disposal of the whole or a corresponding part of those shares; and
b
the new holding shall be treated for the purposes of subsection (3) above as shares in respect of which the relief has been given.
6
M6For the purposes of this section—
a
shares in a company shall not be treated as being of the same class unless they would be so treated if dealt with on the Stock Exchange; and
b
references to a disposal of shares include references to the grant of an option (after 18th March 1986) the exercise of which would bind the grantor to sell the shares.
See—s.360(3A)—exclusion of relief for interest on loan to purchase close company shares if BES relief claimed.1988(F) ss.50-53and Sch.4for changes applicable in respect of shares issued on or after 29July 1988and before the end of 1993in respect of private rented housing.