Taxation of Chargeable Gains Act 1992 Schedule 7AC paragraph 16

Effect of investing company's liquidation

Section 16 ensures that when an investing company or a fellow group member enters liquidation, the substantial shareholding exemption rules continue to apply as though the company itself still owns and controls its assets, despite those assets having formally vested in a liquidator.

• When a company enters liquidation, its assets formally vest in the liquidator under insolvency legislation, but for the purposes of the substantial shareholding exemption the company is still treated as the beneficial owner of those assets.
• Any actions the liquidator takes in relation to those assets are treated as actions of the company itself.
• This treatment applies equally whether it is the investing company or another company in the same group that is in liquidation.
• Any transfers of assets between the company and its liquidator are disregarded — they are not treated as acquisitions or disposals for the purposes of these rules.