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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Share exchange: TCGA92/S135: company office


TCGA92/S135 only affects the shareholders and not the company whose shares are being acquired. But the company office has an important role to play in the procedure. This is because the company file may be the only source of information on whether the technical and anti-avoidance conditions of Section 135 are met.

Check accounts

Notifications of clearances and refusals are sent to the company office. When you receive the relevant accounts you should check that

  • the transaction took place in accordance with the clearance given
  • there is nothing to suggest the clearance application did not provide full and complete information.

If you have any doubts whether either of these conditions is satisfied you should send a report and your file to Capital Gains Technical Group. You should also make a report if one is asked for in the instructions that accompanied the copy of the clearance letter.

When you receive enquiries from the shareholder office in accordance with CG52660 you can confirm that TCGA92/S135 will apply

  • if clearance has been given
  • if the transactions have been carried out in accordance with the clearance application and
  • one of the technical conditions in TCGA92/S135 (1) is satisfied, see CG52523.

If clearance has been refused, you should send the shareholder office a copy of the refusal and ask them to follow CG52670.

You may receive enquiries from the shareholder’s office before the relevant accounts have been received. You should ask the company or its accountants for sufficient information to enable you to make the necessary checks.

Reports to Capital Gains Technical Group

You should send a report to Capital Gains Technical Group together with your file if

  • you receive enquiries from a shareholder Office before you have got notification from the Clearance & Counteraction Team, Anti-Avoidance Group or
  • you become aware of a share exchange for which no clearance notification has been received from the Clearance & Counteraction Team, Anti-Avoidance Group.

If you make a report under this paragraph it is not necessary to make a separate report under CTM 36875 subheading (f) or (i).