CG52760 | Company reconstructions: shareholder: TCGA92/S136: introduction

Quoted Companies

If the original holding of shares or debentures was in a quoted company then, in the main, online information stating the values of quoted shares and securities can be relied upon. If you have any queries about these values, however, contact Shares and Assets Valuation to discuss further

Unquoted companies

If the original company is unquoted you must consider whether the technical and anti-avoidance provisions are satisfied.

To consider whether the technical conditions are met you may need to request information from the company. The main technical requirement for Section 136 to apply is that there is a scheme of reconstruction. The requirements are outlined in Sch 5AA (see CG 52707).

To consider whether the anti-avoidance provisions are satisfied you should contact the Clearance and Counteraction team (CCT) to determine whether clearance has been granted.

It is your responsibility to check the transactions have been carried out in accordance with the details in the notification of clearance. If you cannot satisfy yourself that they have then the case should be referred to Capital Gains Technical Group.

The anti-avoidance provisions only apply to taxpayers that alone or with connected persons own more than 5 per cent of, or of any class of, the issued shares or debentures of the company. Taxpayers who control smaller shareholdings are concerned only with whether the transactions meet the technical requirements of Section 136. If, on or after 1 December 2003, that Company holds some of its shares in treasury these don’t count as issued share capital when it comes to the calculation see CG50287.