HMRC internal manual

Capital Gains Manual

Roll-over relief on transfer of shares to an approved Share Incentive Plan: Introduction and Statute





A form of roll-over relief exists at TCGA92/S236A and TCGA92/SCH7C. This relief, available from 28 July 2000, is designed to encourage shareholders wanting to dispose of their shares to sell them to the trustees of an approved Share Incentive Plan established for the benefit of all the employees of the company. This relief lets shareholders other than companies defer Capital Gains Tax when they dispose of unlisted shares. It is broadly available to shareholders in unlisted companies that are not subsidiaries of other companies, whether or not the subsidiary is a trading company. The shareholders must acquire replacement assets which are chargeable assets for Capital Gains Tax. There is no charge to Capital Gains Tax until the disposal of the replacement assets.

If you need to know about

  • gifts to employee trusts generally, see CG36000+ 
  • Share Incentive Plans and employee share schemes generally, see CG56300+ and the Share Schemes Manual at ETASSUM20000+
  • transfers to the trustees of an Share Incentive Plan, see CG61970+ 
  • Employee Share Ownership Trusts generally, see BIM44000 onwards, TM3850+ & TM3900+.

The legislation for the relief is in TCGA92/SCH7C.

  • Paragraph 1 sets out the conditions for the relief.
  • Paragraph 2 lists the conditions for the disposal.
  • Paragraph 3 provides for the reinvestment of the disposal proceeds.
  • Paragraph 4 defines the terms used in paragraphs 2 and 3.
  • Paragraph 5 sets out the terms on which the relief can be claimed.
  • Paragraph 6 sets out special provisions for dwelling houses (this includes part of a dwelling house and land).
  • Paragraph 7 sets out special provisions for Enterprise Investment Scheme shares.
  • Paragraph 8 explains the meaning of chargeable asset.

The relief operates in a similar way to the business asset roll-over relief in TCGA92/S152 - TCGA92/S159A. CG60250+ tell you about this.

This guidance tell you about the

  • conditions for the relief, see CG61972 to CG61974
  • qualifying replacement assets, see CG61975 and CG61976
  • computation of the relief, see CG61978