Taxation of Chargeable Gains Act 1992

[F1 [F2 Periods of share ownership not to count if company is not active U.K.

Textual Amendments

F1 Sch. A1 inserted (with effect in accordance with s. 121(4) of the amending Act) by Finance Act 1998 (c. 36), s. 121(2), Sch. 20

F2 Sch. A1 para. 11A and cross-heading inserted (with effect in accordance with Sch. 10 para. 3(2) of the amending Act) by Finance Act 2002 (c. 23), Sch. 10 para. 3(1)

11A (1) Where there is a disposal of an asset consisting of shares in a company, any period after 5th April 1998 during which the asset consisted of shares in a company that— U.K.

(a) was a close company, and

(b) was not active,

shall not count for the purposes of taper relief.

(2) Subject to the following provisions of this paragraph, a company is regarded as active at any time when—

(a) it is carrying on a business of any description,

(b) it is preparing to carry on a business of any description, or

(c) it or another person is winding up the affairs of a business of any description that it has ceased to carry on.

(3) In sub-paragraph (2) above—

(a) references to a business include a business that is not conducted on a commercial basis or with a view to the realisation of a profit, and

(b) references to carrying on a business include holding assets and managing them.

(4) For the purposes of this paragraph a company is not regarded as active by reason only of its doing all or any of the following—

(a) holding money (in any currency) in cash or on deposit;

(b) holding other assets whose total value is insignificant;

(c) holding shares in or debentures of a company that is not active;

(d) making loans to an associated company or to a participator or an associate of a participator;

(e) carrying out administrative functions in order to comply with requirements of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 or other regulatory requirements.

(5) Notwithstanding anything in sub-paragraphs (2) to (4) above a company shall be treated as active for the purposes of this paragraph if—

(a) it is the holding company of a group of companies that contains at least one active company, or

(b) it has a qualifying shareholding in a joint venture company or is the holding company of a group of companies any member of which has a qualifying shareholding in a joint venture company.

(6) In this paragraph “associated company” has the meaning given by section 416 of the Taxes Act and “participator” and “associate” have the meaning given by section 417 of that Act.

(7) Any reference in this paragraph to shares in or debentures of a company includes an interest in, or option in respect of, shares in or debentures of a company.]]