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HMRC internal manual

Lloyd's Manual

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HM Revenue & Customs
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Capital gains: Names: reinvestment relief

Until 1997-98, Names could claim reinvestment relief (TCGA92/S164A to TCGA92/S164N) toroll-over gains on the disposal of syndicate capacity or other assets used to backunderwriting, to the extent that the gain was reinvested in ‘qualifyinginvestments’ within the ‘qualifying period’.

From 6 April 1998, modified rules for the Enterprise Investment Scheme: re-investment(deferral relief) replaced re-investment relief. Re-investment relief does not thereforeapply to roll-over the capital gain on disposals where the Name makes the re-investment,by acquiring eligible shares, on or after 6 April 1998. The deferral relief is given underTCGA92/SCH5B. See CG62900 for details (LLM10000).

Some of the statutory requirements for EIS deferral relief for 1998-99 onwards are similarto those for re-investment relief. For example, qualifying investments are, broadly,ordinary shares in unquoted trading companies that are carrying on qualifying trades. Asbefore, insurance business is specifically excluded from being a qualifying trade sorelief is not available on the acquisition of shares in corporate members of Lloyd’s.Other conditions are different from those for re-investment relief. For example, therelief is only available for acquisitions of newly-issued shares, and the range ofexcluded trading activities was extended.