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HMRC internal manual

Venture Capital Schemes Manual

CVS: deferral relief: identification of disposals


If an investing company makes a part disposal of a holding of shares in a company and the holding includes shares (which the investing company has held continuously since they were issued) to which investment relief is attributable there are special rules to identify the particular shares disposed of.

‘Holding’ in this context means any number of shares of the same class held in the same capacity growing or diminishing as shares are acquired and disposed of.

The normal share identification rules in TCGA92, see CG50590 onwards, do not apply. Shares to which investment relief is attributable are not pooled in a TCGA92/S104 holding. If the investing company has acquired shares on different days the disposals are identified first against the earliest acquisition. If shares are acquired, or are treated for TCGA92 purposes as acquired on the same day, any shares to which investment relief is attributable are treated as being disposed of after the others.