Section 68: Share loss relief
257.This section introduces share loss relief. It is based on sections 573(1) and 575(1) and (3) of ICTA.
258.Subsection (1) outlines the basic structure of the relief, namely that a company (“the investor company”) is eligible for share loss relief if the following conditions are met:
the investor company has “subscribed for” shares in another company (“the investee company”) (see the commentary on section 73),
the investee company is a “qualifying trading company” (see the commentary on section 78),
the investor company incurs an allowable loss for the purposes of corporation tax on chargeable gains on the disposal, and
the investor company meets the eligibility conditions (see the commentary on section 69).
259.Subsection (2) provides that relief is only available if the disposal is of one of the kinds specified in paragraphs (a) to (d).
260.Subsection (2)(a) is based on section 575(1)(a) of ICTA which specifies as one of the kinds of disposal:
“a disposal by way of a bargain made at arm’s length for full consideration.”
261.The words “for full consideration” have been omitted from subsection (2)(a) on the basis that they add nothing. See Change 11in Annex 1.
