34(1)Where—
(a)A QAHC (“Q”) holds a substantial shareholding in a company as a result of a disposal of qualifying shares to it from a company (“G”) made at a time when Q and G are members of the same group,
(b)immediately before the disposal, G held a substantial shareholding in that company as a result of holding the shares that were disposed of,
(c)at that time, those shares had been held by G for less than 12 months,
(d)following the disposal Q holds those shares until they have been held by G and Q between them for a total period of 12 months (whether or not Q remains a QAHC at the end of that period), and
(e)if the shares had instead been held by Q throughout that entire period and Q were to dispose of them immediately after the end of that period, any gain on that disposal would not be a chargeable gain as a result of an exemption under Part 1 of Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding),
any gain accruing to G on the disposal to Q is not a chargeable gain.
(2)But in determining, for the purposes of sub-paragraph (1)(e), whether a gain on a disposal would not be a chargeable gain as a result of an exemption under Part 1 of Schedule 7AC to TCGA 1992, that Schedule has effect as if—
(a)paragraph 9 of that Schedule (aggregation of holdings of group companies) were omitted,
(b)paragraph 11 of that Schedule were omitted, and
(c)in paragraph 19(1), the references to the time of the disposal were instead to the end of the 12 month period referred to in sub-paragraph (1)(d).
(3)Where—
(a)a company that has ceased to be a QAHC (“C”) acquired (when it was a QAHC) shares from a company (“G”) as a result of a transfer described in paragraph 33(1) (disposal to QAHC by member of same group),
(b)immediately before the disposal, G held a substantial shareholding in a company as a result of holding the shares that were disposed of,
(c)at that time, those shares had been held by G for less than 12 months, and
(d)following the disposal C holds those shares until they have been held by G and the C between them for a total period of 12 months,
C is, for the purposes of paragraph 7 of Schedule 7AC to TCGA 1992, to be deemed to have held the shares for that entire period.