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HMRC internal manual

Capital Gains Manual

Investors’ Relief: Receipts of insignificant value

 

TCGA92/Sch7ZB/Para 3(2), (3), (4) & (5)

 

A receipt of value will not cause shares to be prevented from being (or of being in the future) qualifying shares where the amount received is an amount of insignificant value.

An amount of insignificant value means an amount of value which:

 

  • does not exceed £1,000

 

But, an amount of value cannot be treated as insignificant if any arrangements exist in the period starting one year before the shares were issued and ending at the end of the issue date, which provide for:

 

  • the investor, or

 

  • a person who, at any time in the period of restriction relating to the shares, is an associate of the investor (whether or not he is an associate at the time of the receipt of value),

 

to receive, or to be entitled to receive, any value at any time in the period of restriction relating to the shares from:

 

  • the company that issued the shares, or

 

  • a person who, at any time in the period of restriction relating to the shares is connected with the company (whether or not the connection exists at the time of the receipt of value).

Multiple receipts of insignificant value

Special rules apply where an investor receives value from the company (the relevant receipt) and, during the period of restriction relating to the shares, has previously received one or more receipts of insignificant value (the earlier receipt(s)). In such cases the amounts of the relevant receipt and the earlier receipt(s) are added together. If the aggregate amount is not an amount of insignificant value, the investor is treated for Investors’ Relief purposes as though the amount of the relevant receipt were equal to the aggregate amount.

 

Once a receipt of insignificant value has been used in this way to increase the amount of a relevant receipt it is ignored in relation to any further receipts of value. References to the investor include anyone who is an associate of the investor, and the reference to the company includes any person who is connected with the company (whether or not the connection exists at the time of the receipt of value).

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