Section 76: Disposal of shares forming part of mixed holding
286.This section deals with the identification of shares disposed of where those shares form part of a “mixed holding”. It is based on section 576 of ICTA, with a number of changes.
287.Section 576 of ICTA is concerned with a holding which comprises shares for which a person has subscribed and shares which the person has acquired otherwise than by subscription.
288.Subsection (1) provides that this section applies to a holding in which some only of the shares are shares “that are not capable of being qualifying shares” (as defined in section 75(8)). See Change 14in Annex 1 which contains a detailed explanation of why a mixed holding has been defined in terms of a holding which includes such shares.
289.Subsection (2) provides that the section applies for the purpose of determining the questions:
whether the shares disposed of are qualifying shares (as defined in section 75); and
which of any qualifying shares acquired at different times are disposed of.
290.This is a change from section 576(1) of ICTA, which is not expressed to apply for the purpose of determining which of any qualifying shares are disposed of. See Change 15in Annex 1.
291.Subsection (3) introduces the rules for determining the questions in subsection (2), including in subsection (4) the application of the identification rules in sections 105 and 107 of TCGA. See Change 16in Annex 1.
292.Subsection (7) is new and puts on a statutory basis the practice under which questions which cannot be determined by the specific provisions of this section are to be determined on a just and reasonable basis. This subsection is principally required in cases where qualifying shares and shares which are not qualifying shares were acquired, or are treated as having been acquired, on the same day. See Change 16in Annex 1.
293.Subsection (8) (defining “holding”) omitssection 576(1D)(b) of ICTA, which applies subsection (4) of section 104 of TCGA. That subsection can apply only to employees and is, therefore, otiose in relation to an investment company.
