Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 10

Periods of share ownership not to count where there is a change of activity by the company

Schedule A1 paragraph 10 restricts the qualifying period of share ownership for entrepreneurs' relief where the company whose shares are being disposed of has undergone a significant change in its trade or business activities.

• Where a company changes the nature of its trade or activities, periods of share ownership before the change may not count towards the qualifying holding period for entrepreneurs' relief.
• The provision targets situations where a company ceases to be a trading company or ceases to carry on a qualifying business activity, and then later resumes or starts a different qualifying activity.
• The effect is that the qualifying ownership period effectively restarts from the point at which the company resumes qualifying activities, preventing shareholders from relying on historical ownership periods that predate a fundamental change in the business.
• This rule was amended by the Finance Act 2008 Schedule 2 paragraph 45, and ensures that the relief is properly targeted at genuine long-term involvement in a qualifying trading business rather than passive or changed investments.

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