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HMRC internal manual

Capital Gains Manual

Substantial shareholdings exemption: the trading company/group/subgroup requirements - trade


The following are trades for the purposes of the Substantial Shareholding Exemption:

  • anything that is a trade, profession or vocation within the meaning of the Income Tax Acts and is conducted on a commercial basis with a view to the realisation of profits (Paragraph 27 of Schedule 7AC TCGA 1992), and
  • any Schedule A business (within the meaning of ITTOIA 2005) which consists in the commercial letting of holiday accommodation in the United Kingdom (section 241(3) TCGA 1992 as amended by paragraph 3 of Schedule 8 to Finance Act 2002).

Activities, such as farming, that are treated as a trade by section 53 ICTA 1988, are trades for the purposes of the Income Tax Acts.