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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Company reconstructions: shareholder: TCGA92/S136: introduction

Quoted companies: shareholder office

If the original holding of shares or debentures was in a quoted company you should follow the treatment published by the commercial service Interactive Data (formerly Extel). Shares and Asset Valuation subscribe to this. If the transaction is not shown in Interactive Data you should follow the guidance for unquoted companies.

Unquoted companies: shareholder office

The procedure for dealing with computations prepared on the basis that TCGA92/S136 applies is very simple. You ask the company office, see CG52763. The main technical requirement for Section 136 to apply is that there is a scheme of reconstruction. Only the company office can consider this. The company office may know whether clearance has been granted. You should contact the clearance team in Counter-Avoidance Directorate if you cannot trace the company office.

This guidance also applies if you are dealing with a shareholder that, alone or with connected persons, owns 5 per cent or less of or of any class of, the issued shares or debentures. This is necessary because the company office also takes responsibility for advising you whether the technical conditions of TCGA92/S136 are satisfied. If, on or after 1 December 2003, that company holds some of its shares in treasury these don’t count as issued share capital when it comes to the calculation (see CG50287).

You should inform the company office if your shareholder has a holding of 5 per cent or less. If you do not the company office will assume the holding is greater and that the anti-avoidance provisions can apply.