Qualifying corporate bonds: substantial shareholding exemption
Under TCGA 1992 Sch 7AC gains on the disposal of a substantial shareholding by a corporate entity may be exempt from the charge to tax on capital gains. Under paragraph 4(1) to establish whether there is a disposal on which a corporate shareholder would qualify for the exemption the non disposal rules in sections 127 and 116(10) are deemed not to apply, i.e. they are temporarily disregarded. If the conditions in Sch 7AC are met so that the exemption will apply then paragraph 4(3)(a) provides that sections 116(10) and 127 will not apply, i.e. they are permanently disregarded. CG53000+ provides fuller details of Sch 7AC.