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HMRC internal manual

Venture Capital Schemes Manual

Share Loss Relief: how to use the guidance: when was the disposal?

In all cases it is important to establish the date of the disposal (or deemed disposal) of shares which gives rise to the allowable loss. There are three principal reasons for this. Firstly, it is necessary in order to apply the rules in TCGA 1992 for computing the amount of any allowable loss. Secondly, it fixes the year of the loss and hence the year or years (or accounting periods) in which relief may be given. Thirdly, it determines precisely which statute is applicable to the claim and hence which of the several slightly different sets of conditions and requirements must be met and in which part of the Taxes Acts they are to be found.

The date of the disposal will govern - amongst other things - the exact rules which determine the availability of Share Loss Relief. There are details at VCM70140.

Disposal after 6 March 2001

FA 2001 changed the unquoted share requirement for both EIS (VCM10000) and Share Loss Relief. The requirement must be met throughout a ‘relevant period’, and if shares were issued after 5 April 1998 and before 7 March 2001, but disposed of after 6 March 2001 then the ‘old’ unquoted share requirement continues to apply to the part of the relevant period ended before 7 March 2001.

This guidance, so far as it relates to individuals, is written principally with reference to ITA 2007. The guidance on company claimants is written mainly with reference to CTA 2010, with frequent mention of the earlier ICTA provisions which applied from April 2007 to March 2010.