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HMRC internal manual

Venture Capital Schemes Manual

CVS: investors and reliefs: attribution of relief and identification of shares

FA00/SCH15/PARA45 & PARA93

Where in any accounting period investment relief is obtained for a single subscription for shares, the relief is to be attributed equally to each share. Where there is more than one subscription, the relief is first divided proportionately between the subscriptions. Thus if the corporation tax liability were insufficient to enable full relief to be obtained, whatever relief was obtained would be attributed to each subscription in proportion to the amounts subscribed.

A company which owns shares to which investment relief is attributable may also own other shares, of the same class, in the same company. Also, shares to which relief is attributable may have been acquired at different times. In either of these cases, if the company disposes of some of the shares only we need rules to identify the particular shares disposed of. The rules provided by the statute are as follows.

  • Where shares were acquired on different days, those acquired first are treated as disposed of first.
  • As regards shares acquired on the same day, shares to which no relief is attributable are treated as disposed of first, then shares to which investment relief only is attributable, and lastly shares to which both investment relief and deferral relief are attributable.