Corporation Tax Act 2010

68 Share loss relief

(1) A company which has subscribed for shares in a qualifying trading company is eligible for relief under this Chapter (“share loss relief”) if—

(a) it incurs an allowable loss (for the purposes of corporation tax on chargeable gains) on the disposal of the shares in any accounting period, and

(b) it meets the eligibility conditions (see section 69).

(2) Subsection (1) applies only if the disposal of the shares is—

(a) by way of a bargain made at arm’s length,

(b) by way of a distribution in the course of dissolving or winding up the qualifying trading company,

(c) a disposal within section 24(1) of TCGA 1992 (entire loss, destruction, dissipation or extinction of asset), or

(d) a deemed disposal under section 24(2) of that Act (claim that value of the asset has become negligible).

(3) Subsection (1) does not apply to any allowable loss incurred on the disposal if—

(a) the shares are the subject of an exchange or arrangement of the kind mentioned in section 135 or 136 of TCGA 1992 (company reconstructions etc), and

(b) because of section 137 of that Act, the exchange or arrangement involves a disposal of the shares.

(4) For the meaning of “qualifying trading company”, see section 78.