Income Tax Act 2007 section 377

Identification of securities or shares on a disposal

Section 377 sets out the rules for determining which securities or shares are treated as disposed of when an investor sells only part of a holding that includes securities or shares attracting community investment tax relief (CITR).

• When an investor disposes of part of a holding containing CITR-qualifying securities or shares held continuously since issue, specific identification rules apply to determine which securities or shares are treated as sold
• Securities or shares acquired on an earlier date are treated as disposed of before those acquired on a later date (a "first in, first out" approach)
• Where securities or shares were acquired on the same day, those attracting CITR and held continuously since issue are treated as disposed of last, preserving the tax relief for as long as possible
• Where a share reorganisation has taken place and the new holding is equated with the original shares under capital gains tax rules, shares in the new holding are treated as acquired when the original shares were acquired

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