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HMRC internal manual

Capital Gains Manual

Investors’ Relief: Value received by the investor: introduction



Schedule 7ZB sets out the rules for shares ceasing to be qualifying shares when value is received by the investor from the company during the period starting one year before and ending 3 years after the shares are issued (the period of restriction).

The intention of these rules is to make sure only genuine new investment is given the opportunity to qualify for Investors’ Relief.


If an investor subscribes for shares that are eligible for Investors’ Relief but receives value from the company within the period of restriction, the shares are treated as:


  • Being excluded shares if the value was received on or before the date of issue of the shares, or


  • Becoming excluded shares if the value was received after that date.


Where value is received then all of the shares in the holding will cease to be qualifying (or potentially qualifying) shares.  The amount of value relative to the value of the investment result is not relevant apart from in two situations where a receipt of value may be disregarded:


  • When the value received is insignificant, see CG63643


  • When the original supplier of value receives replacement value, see CG63644


There is also guidance on -


  • the meaning of receiving value at CG63641, and


  • the rule dealing with receiving benefits from a company at CG63642

See CG63500 for a general description of the relief and the layout of the guidance.