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HMRC internal manual

Capital Gains Manual

Group share exchanges: share exchanges

The general rule in TCGA92/S135 is that where a person exchanges shares in one company for shares in another, that person can be treated by the share reorganisation provisions of TCGA92/S127 as not making any disposal of the original shares or any acquisition of the new holding. Instead the original shares and the new holding are treated as the same asset acquired as the original shares were acquired. The result is that the gain up to the time of the share exchange is effectively rolled over into the new holding.