Income Tax Act 2007 section 151

Interpretation of Chapter

Section 151 provides the definitions and interpretation rules for the key terms used throughout Chapter 6, which deals with losses on disposals of shares.

• The section defines essential terms including "bonus shares," "trading company," "excluded company," "holding company," "investment company," and "trading group," each with specific criteria that determine how share loss relief applies.
• The term "shares" generally includes stock but excludes shares or stock that do not form part of a company's ordinary share capital, though this exclusion is switched off in certain specific contexts such as the definition of "excluded company" and provisions on share exchanges and relief limits.
• An "excluded company" is one whose trade consists mainly of dealing in land, commodities, futures, or financial instruments, or whose trade is not carried on commercially, or which is a non-trading holding company, building society, or registered society — and any trade carried on by such a subsidiary is disregarded when assessing whether a group qualifies as a "trading group."
• A disposal of shares that gives rise to an allowable loss for capital gains tax purposes is treated as taking place at the time the disposal is made or deemed to be made under the Taxation of Chargeable Gains Act 1992.