Corporation Tax Act 2010 section 1035

Requirement as to period of ownership

Section 1035 sets out the minimum period for which the seller must have owned the shares being purchased by the company, and provides rules for determining when shares were acquired where the seller has built up a holding over time.

• The seller must have owned the shares continuously for at least 5 years up to the date of the company's purchase.
• Where shares of the same class were acquired at different times, earlier acquisitions are matched first, and any previous disposals are treated as disposals of later acquisitions.
• Where share reorganisation rules under capital gains tax legislation would determine the acquisition date, the same date applies for this section.
• The capital gains tax reorganisation dating rule does not apply if the shares were allotted for payment or were stock dividends within section 1049.