Income Tax Act 2007 section 379

Meaning of "disposal"

Section 379 defines what "disposal" means for the purposes of the Community Investment Tax Relief (CITR) rules, including how share exchanges during company reconstructions are treated.

• The term "disposal" generally carries the same meaning as it does under the Taxation of Chargeable Gains Act 1992, and all related expressions are read in the same way.
• Where an investor's shares or securities are exchanged for new ones as part of a company reconstruction scheme, the exchange is treated as a disposal for CITR purposes, even though it might not normally count as one under capital gains rules.
• This treatment applies regardless of whether the reconstruction would qualify under the normal capital gains rollover provisions in section 136 of TCGA 1992 or would be blocked by section 137(1) of TCGA 1992, which restricts relief to genuine reconstructions.
• The effect is to ensure that CITR investors cannot avoid the consequences of a disposal simply by participating in a share reorganisation or reconstruction scheme.