Income Tax (Trading and Other Income) Act 2005 section 710

Treatment of shares where annual acquisition limit exceeded

Section 710 sets out the rules for determining which shares qualify as "exempt shares" when a taxpayer exceeds the annual acquisition limit for venture capital trust shares in a tax year.

• Shares are treated as exempt shares provided their acquisition does not cause the annual limit to be exceeded at the time they are acquired
• Where shares of different descriptions acquired on the same day push the total over the limit, the exemption is apportioned across each description based on relative market values
• The "appropriate proportion" for each description of shares is the ratio of that description's market value to the total market value of all shares acquired that day
• The "available value" is the remaining headroom under the annual limit on the day of acquisition — that is, the maximum value of shares that could still be acquired without exceeding the limit