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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Targeted anti-loss buying rule - special rules for pooled securities

Disposals of securities from both a pre-change pool and another pool are identified firstly with the asset that is not the pre-change asset. Where the number of securities disposed of exceeds the number comprised in the other pool, the excess is identified with securities from the pre-change pool. Subject to this general order of priority, all other rules regarding the identification of shares disposed of will continue to apply (CG50500+).

The order of priority explained above cannot be overridden, for example where a sale agreement relates to specifically identified share or bond certificates, provided the relevant securities are all held by the company in the same capacity. This final proviso ensures that a disposal of shares held in a nominee capacity, for example, will only be identified with the total holding as nominee where other shares of the same class are held beneficially.

TCGA92/S184F takes priority over other identification rules in Chapter 1, Part 4 in cases where TCGA92/S184A or B are capable of taking effect. If TCGA92/S184A is not in point (say because there were no arrangements for the purpose of securing a tax advantage) then the ordinary share identification rules apply (see CG50500+).

TCGA92/S184F(7) defines ‘pre-change asset’ and ‘securities’ for the purposes of new section 184F. ‘Pre-change asset’ has the same meaning as for new sections 184A and 184B (see CG47032). ‘Securities’ broadly means any shares or securities of a company, but not relevant securities for the purpose of section 108 (qualifying corporate bonds and certain interests in non-qualifying offshore funds).

In common with the ordinary share identification rules in CG50500+, TCGA92/S184F(8) explains that shares or securities of a company are treated as being of the same class where they are, or would be, so treated by the practice of a recognised Stock Exchange.