Taxation of Chargeable Gains Act 1992 Schedule 7AC paragraph 10

Effect of earlier no-gain/no-loss transfer

Paragraph 10 deals with how the period a company is treated as having held shares can be extended to include time the shares were held by a previous owner, where the shares were transferred on a no-gain/no-loss basis or are derived from shares so transferred.

• Where shares have been acquired through a no-gain/no-loss transfer, the holding period is extended to include the time the transferring company held the shares
• This extended holding period also applies through chains of no-gain/no-loss transfers, so that time held by earlier companies in the chain counts as well
• During any extended holding period, the current company is treated as having had the same entitlement to shares and shareholder rights as the company that actually held the shares at that time, including any holdings attributed under the group aggregation rules
• Shares are considered "derived" from other shares in specific circumstances, such as changes in co-ownership, or where a share reorganisation causes a new holding to be treated as the same asset as the original shares