Corporation Tax Act 2010 section 75

Limits on relief

Section 75 limits the amount of share loss relief a company can claim when disposing of qualifying shares that have been pooled or merged with other shares for capital gains purposes.

• Where qualifying shares form part of a pooled holding (a section 104 holding or a 1982 holding), the share loss relief is capped at the amount that would have been allowable if the qualifying shares had never been pooled with other shares.
• Where qualifying shares and non-qualifying shares are treated as acquired in a single transaction on the same day, the relief is capped at the loss that would arise if only the qualifying shares were treated as a single acquisition, ignoring the non-qualifying shares.
• Where a share reorganisation causes qualifying shares and non-qualifying shares (including debentures) in the same company to be treated as the same asset, the relief is capped at the loss that would arise if they were treated as separate assets.
• Shares are not capable of being qualifying shares if they were acquired other than by subscription, if the trading condition was not met at the time of issue, or (for reorganisation purposes) if they are of a different class from the qualifying shares being disposed of.