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HMRC internal manual

Venture Capital Schemes Manual

VCT: investor CG deferral relief: share exchanges: where original shares have disposal relief

The approach to the recapture of deferred gains on share exchanges and company reconstruction or amalgamation depends on whether the original shares involved in the transaction qualify for CGT disposal relief. As explained at VCM53320, if the original shares have disposal relief and the new assets are not ordinary shares in a VCT, TCGA92/S135 and TCGA92/S136 are disapplied by TCGA92/S151B(5). The transaction is treated as a disposal. So any deferred gain is brought back into charge, see VCM53090 (a).