VCM93070 - CVS: deferral relief: company restructuring: general

FA00/SCH15/PARA80

A number of special provisions apply where there is a:

  • ‘reorganisation’ of the issuing company’s share capital (TCGA92/S126, see CG51700 onwards), or
  • scheme of reconstruction or amalgamation (such as a take-over or corporate merger) which entails the shares or securities of another company being issued in exchange for, or in respect of, the issuing company’s own shares or securities.

All the TCGA92 rules that apply in the event of share reorganisations, company reconstruction and amalgamations, have effect subject to the adaptations made for the CVS.

Where an investing company holds shares of the same class in the issuing company which it has acquired in the same capacity at different times or in different ways, it is possible that the shares may fall into two or more of the following categories:

  1. shares to which both investment relief and deferral relief are attributable (and which the investing company has therefore held continuously since issue),
  2. shares to which investment relief, but not deferral relief, is attributable (and which the investing company has held continuously since issue), and
  3. shares falling into neither of the above categories.

If the shares can be split up into two or three of the above categories that should be done first. The rules in TCGA92/S116 and S127 (see CG53820 onwards and CG51805 onwards) are then applied (as appropriate) to each category separately.