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HMRC internal manual

Venture Capital Schemes Manual

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Share Loss Relief: individual and corporate claimants: individual claimants: more complex cases: disposal of shares forming part of a mixed holding: introduction

A mixed holding consists of shares which are not capable of being qualifying shares and other shares (for the definition of qualifying shares and other terms see VCM71020). If the whole of a mixed holding is disposed of then it will be clear how many qualifying shares are involved and there will be no difficulty in identifying those shares with specific acquisitions. But if only part of a mixed holding is disposed of then two questions will arise:

  • firstly, have any qualifying shares been disposed of, or is the disposal exclusively of shares which are not capable of being qualifying shares?
  • secondly, if qualifying shares have been disposed of, which acquisitions of qualifying shares does the disposal relate to?

ITA07/S148 addresses these questions.

The approach to adopt depends on whether the mixed holding contains any of the following types of share immediately before the disposal:

  • shares to which Seed Enterprise Investment Scheme relief is attributable,
  • shares issued before 1 January 1994 in respect of which Business Expansion Scheme relief has been given and has not been withdrawn,
  • shares to which Enterprise Investment Scheme relief is attributable,
  • shares to which deferral relief (under TCGA92/SCH5B) is attributable, ie shares in a qualifying company on the acquisition of which some or all of an original gain was postponed.

If the mixed holding contained any such shares then the shares disposed of are to be identified using the rules at section 148(6), see VCM75460. Otherwise the rules at section 148(4) and (5) apply, see VCM75450.