Part 4

Loss relief
Chapter 5

Losses on disposal of shares

Share loss relief against income

Share loss relief
68
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.
Pt. 4 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Risk Transformation (Tax) Regulations 2017 (S.I. 2017/1271), regs. 1(1), 10
Pt. 4 excluded (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), s. 1(5)(e) (with ss. 15(1), 16(1))