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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Deferred consideration: shares/securities: the election - form and time limits

TCGA92/S138A (5) & (6)

An election under TCGA92/S138A may be made by the person on whom an earn-out right was conferred to have the right treated as a security (if it was conferred before 10 April 2003), or to have it not treated as a security (if it was conferred after 9 April 2003). The election must be made by notice in writing given to an officer of the Board

  • in the case of a company within the charge to CT, within two years of the end of the accounting period in which the right is conferred - TCGA92/S138A (5)(a)
  • in any other case, the first anniversary of 31 January next following the year of assessment in which the right is conferred - TCGA92/S138A (5)(b).

There is no prescribed form for the election. The election is irrevocable.