Corporation Tax Act 2010 section 266

Meaning of "disposal"

Section 266 defines what "disposal" means for the purposes of the Community Investment Tax Relief (CITR) rules, including how company reconstructions and share exchanges are treated.

• The term "disposal" takes its meaning from the Taxation of Chargeable Gains Act 1992, and all related expressions follow the same interpretation.
• Where a company reconstruction or reorganisation would normally result in shares or securities being treated as exchanged rather than disposed of, the CITR rules override this and treat the investor as having made a disposal.
• This deemed disposal applies whether the share exchange would have qualified as a genuine reconstruction under the capital gains rules or not.
• The effect is to ensure that company reorganisations and share-for-share exchanges do not allow investors to sidestep the CITR disposal rules that can trigger a withdrawal of tax relief.