Taxation of Chargeable Gains Act 1992 Schedule 8B paragraphs 1–2

When does the Schedule apply?

Section Schedule 8B paragraphs 1 and 2 set out the circumstances in which an individual may claim hold-over relief by deferring a chargeable gain that is reinvested into a qualifying social enterprise.

• The schedule applies where an individual makes a chargeable gain, acquires a "social holding" (shares or debentures in a social enterprise), is eligible for Social Investment (SI) income tax relief on the amount invested, and meets conditions relating to timing, UK residence, personal capacity, and the investment window.
• The gain must accrue between 6 April 2014 and 5 April 2023, the investor must be UK resident at the time the gain arises and when the social holding is acquired, and the social holding must be acquired within the period from one year before to three years after the gain accrues.
• Where a gain qualifying for Business Asset Disposal Relief arises under section 169N, only the portion of the gain taxed at the normal capital gains tax rate (not the reduced Business Asset Disposal Relief rate) is eligible for this hold-over relief, ensuring the two reliefs cannot apply to the same part of a gain.
• A second route into the relief exists where a previously deferred gain is triggered because the social enterprise reacquires, cancels, redeems or repays the original holding, but the investor receives replacement shares or debentures from the same social enterprise in exchange — even though no cash changes hands — allowing the gain to be deferred again provided equivalent conditions are met.