Taxation of Chargeable Gains Act 1992 Schedule 5C paragraph 2

The postponement of the original gain

Schedule 5C paragraph 2 sets out how a chargeable gain arising on a qualifying disposal can be postponed (held over) when the proceeds are reinvested in shares that qualify under the Enterprise Investment Scheme or similar venture capital reliefs.

• When a person makes a qualifying disposal and reinvests the proceeds in qualifying shares, they can claim to postpone (hold over) all or part of the chargeable gain that would otherwise arise on the original disposal.
• The amount of gain that can be postponed is limited to the lower of the original chargeable gain and the amount reinvested in the qualifying shares.
• The postponed gain is not charged to capital gains tax at the time of the original disposal but is instead effectively deferred until a chargeable event occurs in relation to the qualifying shares acquired with the reinvested proceeds.
• A claim for postponement must be made within the applicable time limits, and the reinvestment must meet the qualifying conditions for the relief to apply.