CG52660 | Share exchange: TCGA92/S135: procedure

Quoted companies
Unquoted companies

The anti-avoidance provisions and the clearance procedure affect the way you should deal with computations prepared on the basis that TCGA92/S135 applies. The procedures depend upon whether the company being acquired was quoted or not.

Quoted companies

If the company being acquired was quoted then you can accept that TCGA92/S135 applies if the company has notified its shareholders of that.

you should follow the instructions for unquoted companies.

Unquoted companies

If the company being acquired is unquoted you must consider whether the technical and anti-avoidance provisions are satisfied. To consider whether either of the technical conditions are met you may need to request information from the company. To consider whether the anti-avoidance provisions are satisfied, HMRC staff should contact the Clearance and Counteraction team (CCT) to determine whether clearance has been granted.

You can accept that TCGA92/S135 will apply

• if clearance has been given,

• if the transactions have been carried out in accordance with the clearance application and

• one of the technical conditions in TCGA92/S135 (1) is satisfied, see CG52523.

You should make a submission to Capital Gains Technical Group if you become aware of a share exchange for which no clearance notification has been provided by the Clearance & Counteraction Team.

The anti-avoidance provisions will not be relevant in very small cases, if the shareholder either alone or with connected persons owns 5 per cent or less of, or of any class of, the issued shares or debentures of the company being acquired, see CG52620. Here, you can accept TCGA92/S135 applies if it is obvious the technical conditions of Section 135 are satisfied