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HMRC internal manual

Capital Gains Manual

Effect of disincorporation relief: shareholders


All the shareholders to whom the business is transferred must be individuals who have held shares in the company throughout the 12 month period ending with the business transfer date. The business does not have to be transferred to all of the shareholders of the company.

The business must be transferred as a going concern to those individual shareholders, and they must continue the business in succession. They may act in the capacity of individuals or as individual members of a partnership (but not an LLP). A nominee or bare trustee acting in such a capacity acts as though they were the individual for whom they are nominee/trustee (TCGA92/S60, see CG34320+).

TCGA92/S162B, S162C

The shareholders take on the assets which have been subject to a disincorporation relief claim at a base cost equal to the amount specified in the claim to disincorporation relief.

Where an asset is transferred to more than one shareholder, each shareholder will take on the fraction of the base cost which correlates with their percentage ownership of the asset.