Taxation of Chargeable Gains Act 1992 Schedule 7ZB paragraph 1

Disqualification of shares where value received in period of restriction

Schedule 7ZB paragraph 1 sets out the rules under which shares issued to an investor lose their qualifying status if the investor receives value from the issuing company during a defined restricted period.

• Shares issued to an investor are treated as excluded (non-qualifying) shares if the investor receives more than insignificant value from the company during the period of restriction.
• The period of restriction runs from one year before the shares are issued until immediately before the third anniversary of the issue date.
• Individually insignificant receipts of value are aggregated with a later receipt; if the combined total exceeds the insignificant threshold, the investor is treated as having received the full aggregate amount.
• These disqualification rules are subject to the replacement value exception in paragraph 4 of the Schedule.