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HMRC internal manual

Capital Gains Manual

Shares and securities: particular types of company/organisation

Chapter 8, CG56600+, deals with particular types of company/organisation. It is particularly concerned with the treatment of the shareholders in the company or the member of the organisation.

  • BUILDING SOCIETIES. Building society share accounts are treated as shares but disposals cannot create a loss because no indexation allowance is given. There are special rules to deal with the incorporation of building societies.
  • BUSINESS EXPANSION SCHEME. For Capital Gains Tax purposes there is an important distinction between shares issued on or before 18 March 1986 and after that date. Shares issued after 18 March 1986 on which BES relief has been given and not withdrawn are exempt from Capital Gains Tax. There are rules for dealing with share pooling and share reorganisations. The Business Expansion Scheme ended on 31.12.1993. It was replaced by the Enterprise Investment Scheme on which there are instructions at CG62800.
  • CLOSE COMPANIES. This section deals with two different topics. First the disposal of shares in a company which has been subject to a close company apportionment. Second the disposal of shares in a company which has transferred assets at undervalue to its members.
  • NON-RESIDENT COMPANIES. This section deals with TCGA92/S13 and TCGA92/S14 which allow the gains of certain non-resident companies to be taxed on their UK resident shareholders, or participators where gains accrue on or after 28 November 1995.
  • UNIT TRUSTS. Units in a unit trust are treated as though they were shares in a company. This section also explains the treatment of accumulation units and monthly saving schemes.