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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Substantial shareholdings exemption: the trading company/group/subgroup requirements - as soon as is reasonably practicable in the circumstances

TCGA92/SCH7AC/PARA20 & TCGA92/SCH7AC/PARA21 & TCGA92/SCH7AC/PARA22

Rather than impose a fixed time limit, the legislation allows companies whatever time is reasonable, having regard to the particular circumstances, to prepare to carry on a new trade or to acquire a trade or trading company. What is reasonably practicable in the circumstances will depend on the facts in each case.

For example, a company may be in negotiations to acquire a trading company but owing to circumstances beyond its control the purchase is delayed. There might be, for example, a problem with the vendor proving title to the company’s assets. In such a case we would not suggest that the acquisition had not been made as soon as was reasonably practicable in the circumstances where this was the reason for the delay.