Taxation of Chargeable Gains Act 1992 Schedule 5B paragraph 15

Investment-linked loans

Section 15 deals with the impact of investment-linked loans on the eligibility of shares for capital gains deferral relief, ensuring that investors cannot benefit from deferral relief where the share subscription is effectively funded by a connected loan.

• If an investor (or an associate) receives a loan that is linked to their subscription for eligible shares, those shares lose their eligibility for deferral relief
• A loan made on or before the share issue date means the shares are treated as never having been eligible; a loan made after the issue date means the shares cease to be eligible from the date of the loan
• A loan is considered investment-linked if it would not have been made, or would not have been made on the same terms, had the individual not subscribed for the shares or not been proposing to do so
• The rules extend beyond straightforward loans to include the giving of credit and the assignment of debts, and apply equally to loans made to the investor's associates