Income Tax Act 2007 section 330

Power to facilitate company reorganisations etc. involving exchange of shares

Section 330 gives the Treasury the power to make regulations so that, when shares or securities are exchanged as part of a genuine commercial company reorganisation, the new shares can be treated as meeting the qualifying holdings requirements even if they would not otherwise do so.

• Where qualifying shares are exchanged for new shares that do not meet the Chapter 4 qualifying holdings requirements, regulations can treat the new shares as qualifying — provided the exchange is for genuine commercial reasons and not mainly for tax avoidance
• The power also covers exchanges of non-qualifying shares for other non-qualifying shares, allowing regulations to determine how the new shares are treated, when they are regarded as acquired, and how they are valued
• "Exchange" is interpreted broadly to include any company reorganisation or arrangement where a shareholder receives new shares or securities, whether the originals are transferred, cancelled or retained, and whether the new shares are in the same or a different company
• Regulations may vary by case, include administrative provisions such as advance clearance procedures, and — in the case of exchanges of qualifying shares — may have retrospective effect