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HMRC internal manual

Capital Gains Manual

Group share exchanges: reversal of Woolcombers decision

Whether the statutory reversal of the Woolcombers decision applies depends on the date of the share exchange, not on the date of the disposal of the target shares acquired on the share exchange by the interposed company. Accordingly if there is a disposal at any time of target shares acquired on a pre-15 March 1988 share exchange, the capital gains cost of the target shares to the interposed company is determined by the Woolcombers decision. The capital gains cost to the interposed transferee company is arrived at by applying the no gain/no loss rule.