Part V

Transfer of business assets, business asset disposal relief and investors' relief
Chapter 5

Investors' relief

Qualifying shares

Qualifying shares, potentially qualifying shares and excluded shares
169VB
1
Where there is a disposal of all or part of (or of an interest in) a holding of shares in a company, this section applies to determine whether a share which is in the holding at the time immediately before the disposal (“
the relevant time
”) is for the purposes of this Chapter—
a
a qualifying share,
b
a potentially qualifying share, or
c
an excluded share.
2
The share is a “qualifying share” at the relevant time if—
a
the share was subscribed for, within the meaning given by section 169VU, by the person making the disposal (“the investor”),
b
the investor has held the share continuously for the period beginning with the issue of the share and ending with the relevant time (“the share-holding period”),
c
the share was issued on or after 17 March 2016,
d
at the time the share was issued, none of the shares or securities of the company that issued it were listed on a recognised stock exchange,
e
the share was an ordinary share when issued and is an ordinary share at the relevant time,
f
the company that issued the share—
i
was a trading company or the holding company of a trading group (as defined by section 169VV) when the share was issued, and
ii
has been so throughout the share-holding period,
g
at no time in the share-holding period was the investor or a person connected with the investor a relevant employee in respect of that company (within the meaning given by section 169VW), and
h
the period beginning with the date the share was issued and ending with the date of the disposal is at least 3 years.
3
The share is a “potentially qualifying share” at the relevant time if—
a
the conditions in subsection (2)(a) to (g) are met, but
b
the period beginning with the date the share was issued and ending with the date of the disposal is less than 3 years.
4
The share is an “excluded share” at the relevant time if it is, at that time—
a
not a qualifying share, and
b
not a potentially qualifying share.
5
This section is subject to Schedule 7ZB (disqualification of share where value received by investor).
6
In relation to a share issued on or after 17 March 2016 but before 6 April 2016, any reference in subsection (2)(h) or (3) to “3 years” is to be read as a reference to the minimum period.
7
In subsection (6) “
the minimum period
” means the period of 3 years extended by a period equal in length to the period beginning with the date the share was issued and ending with 5 April 2016.
Words in Pt. 5 heading inserted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 14 para. 1(1)
Words in Act substituted (with effect for the tax year 2020-21 and subsequent tax years) by Finance Act 2020 (c. 14), Sch. 3 paras. 7(2)(a), 8 (with Sch. 3 para. 7(3))
Pt. 5 Ch. 5 inserted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 14 para. 2