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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Substantial shareholdings exemption: the substantial shareholding requirement - aggregation of periods when shares held


Part 2 of Schedule 7AC provides that

  • where shares have been acquired by way of a no gain/no loss transfer (see CG53080A), or
  • where TCGA1992/S127 operates so that, on a reorganisation of share capital an exchange of shares that is treated as involving no disposal of the old shares or acquisition of the new shares, the new shares are treated as the same asset as old shares (see CG53080B), or
  • on a series or combination of such transactions.

When such transactions have occurred the gain over the whole period during which the shares have existed will accrue on their eventual disposal. So the whole period over which the gain accumulated is taken into account in testing whether the substantial shareholding requirement is met.

If the 12 month holding period as applied by TCGA1992/Sch7AC/Para7 is failed, including aggregation in accordance with the bullets above, then periods over which the assets were used for group trades may, subject to certain conditions, be joined together in testing whether a substantial shareholding has been held for a continuous period of 12 months (see CG53080C).