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HMRC internal manual

Capital Gains Manual

Roll-over relief on transfer of shares to Share Incentive Plan: disposal conditions: trustees 10 per cent stake

To qualify for relief, the trustees must hold shares that make up at least 10 per cent ofthe ordinary share capital of the company and carry rights to at least 10 per cent

  • of any profits available for distribution to shareholders


  • of any assets of the company available for distribution to shareholders on a winding up.

In deciding whether these tests are met, you include all the participants’ plan sharesthat are still subject to the approved Share Incentive Plan together with any shares thatthe trustees hold but have not awarded to participants.

The trustees must hold this minimum stake either:

  • immediately after the disposal for which relief is claimed


  • at any time in the twelve months after the disposal.

There is no requirement that the trustees need hold the 10 per cent minimum stakethroughout this twelve month period.

The ordinary share capital of the company means all the issued share capital of thatcompany, other than any fixed rate dividend capital.

Where the company has more than one class of issued share, the 10 per cent test is appliedto the total issued share capital, not to each class of shares.

If, therefore, a company has issued 100 A shares and 100 B shares, the minimum stake is(10 per cent of 200 =) 20, irrespective of whether these are A or B shares.