Income Tax Act 2007 section 257HA

Identification of shares on a disposal

Section 257HA sets out the rules for identifying which shares are treated as disposed of when an investor sells only some of their shares of a particular class in a company, for the purposes of SEIS relief withdrawal on disposal or transfers between spouses or civil partners.

• Shares acquired on an earlier date are always treated as disposed of before shares acquired on a later date (a "first in, first out" rule).
• Where shares were acquired on the same day, those without SEIS relief are treated as disposed of first, then those with SEIS relief only, and finally those with both SEIS relief and SEIS re-investment relief.
• Shares transferred between spouses or civil partners are treated as having been acquired on the date they were originally issued, not the date of the transfer.
• Where a share reorganisation has taken place, new holding shares are treated as acquired when the original shares were acquired, preserving the original acquisition date for disposal ordering purposes.