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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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Share Loss Relief: individual and corporate claimants: individual claimants: when relief is restricted: what to look out for

ITA07/S147 describes three situations in which an upper limit is imposed on the amount of Share Loss Relief which is available on a disposal. These situations involve ‘mixed’ holdings which contain

  • both shares which are capable of being qualifying shares and shares which are not, or
  • shares which are or have been ‘pooled’ for TCGA purposes, or
  • shares which are treated as the same asset as other shares for TCGA purposes.

In each of these situations an allowable loss on the disposal computed using the TCGA rules may not accurately reflect the loss in respect of qualifying shares disposed of. Section 147 together with sections 148 and 149 cater for these situations by allowing the shares disposed of to be identified as qualifying shares or not, where the TCGA rules do not do so, and specifying how and when the amount of Share Loss Relief differs from the allowable loss for chargeable gains purposes.

You should be aware of these possible complicating factors when considering claims to Share Loss Relief. The situations in which they arise are described briefly below and there is detailed guidance on how ITA 2007 deals with them at VCM75300+.