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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Definitions: quoted and listed shares etc.: FA 1996 changes

The following provisions in TCGA 1992 were amended in relation to disposals on or after 1 April 1996, so that references to ‘quoted’ become references to ‘listed’:-

  • Section 144(8)(b), definition of a traded option, see CG55512;
  • Section 165(2)(b)(i), shares or securities in the context of relief for gifts of business assets, see CG66940;
  • Section 276(2)(c) and (6), shares in the context of exploration or exploitation rights;
  • Section 281(3)(c), shares in the context of payment by instalment of tax on gifts, see CG66520;
  • Paragraph 2(2)(b)(i) Schedule 7, shares or securities in the context of relief for gifts of settled property being business assets, see CG66940.

A similar change was made to the definition of ‘qualifying trading company’ in ICTA 1988 which related to relief for losses on unquoted shares in trading companies (Part XIII, Chapter VI), see CG58340. When these provisions were moved to ITA 2007 (Part 4, Chapter 6) the ‘not listed’ criterion was replaced by a requirement that the shares should not be marketed to the general public (ITA07/S184(2)).

The definition of quoted shares and securities for the purposes of TCGA 1992, Section 146 (options: application of rules as to wasting assets) was also amended.

The effect of these amendments is to ensure that, for shares and securities dealt in on the Stock Exchange, the coverage of these provisions remained as it was before the Stock Exchange changes.

However, some parts of TCGA 1992 require that there be an actual quoted price and not merely a listing (which might not include a price). Finance Act 1996 therefore introduced changes to ensure that those provisions only operate where price quotes are available. In the following provisions of TCGA 1992 references to ‘listed’ became references to ‘quoted’, where the relevant date falls on or after 1 April 1996:

  • Section 272(3), valuation: general, see CG59510+;
  • Paragraph 7(1)(a) Schedule 11 (rules for determining market value before 25 March 1973).

‘Quoted’ should be interpreted as meaning ‘listed at a price’, and in the context of the London Stock Exchange, means ‘listed at a price on SEDOL’, TCGA92/S272(3).