Income Tax Act 2007 section 254

Meaning of "disposal of shares"

Section 254 broadens the meaning of "disposal of shares" for the purposes of this Part, so that it covers not only outright sales but also disposals of interests or rights in shares, and treats certain share reorganisations as disposals.

• A "disposal of shares" includes the disposal of any interest or right in or over shares, not just a straightforward sale.
• Where a company reorganisation results in an individual being treated under capital gains tax rules as exchanging old shares for new ones, this counts as a disposal of those old shares for the purposes of this Part.
• This applies even if the individual still physically holds the same original shares alongside newly issued shares after the reorganisation.
• The extended meaning applies only within the context of this Part of the Income Tax Act 2007.