SolvedCG67801 | Reliefs: employee-ownership trusts: the new rules
From HM Revenue & Customs · Capital Gains Manual
Where a disposal qualifies for relief, the way relief is given depends on the date of disposal and whether a gain accrues.
For disposals made on or after 26 November 2025, where a gain accrues, 50% of the gain is treated as a chargeable gain.
For disposals where no gain accrues or for disposals before 26 November 2025 the relief is given by the relevant disposal and acquisition being treated for the purposes of TCGA 1992 as being made for consideration that gives rise to neither a gain nor a loss on the disposal.
The ‘market value’ rule in S17(1) TCGA 1992 does not apply to disposals that qualify for relief or for calculating whether there is a gain.
The basic requirements of the relief are that
a person other than a company, referred to as ‘P’,
disposes of ordinary share capital of a company, referred to as ‘C’, to the trustees of a settlement,
the ‘relief requirements’ are all met, and
P makes a claim.
Relief is also available where there is a deemed disposal by reason of the trustees of a settlement becoming absolutely entitled as against the trustees of settled property (‘the transferring trustee’) and
that settled property is the ordinary share capital of a company,
the relevant ‘relief requirements’ are met, and
the ‘transferring trustee’ makes a claim.
Although S236H(1)(a) TCGA 1992 states that P cannot be a company, this does not apply to corporate trustees who can still make a claim.
Where a disposal qualifies for relief, this is given by the relevant disposal and acquisition being treated for the purposes of TCGA 1992 as being made for consideration that gives rise to neither a gain nor a loss on the disposal. The ‘market value’ rule in S17(1) TCGA 1992 does not apply to such disposals.