What does 'interest in shares' mean under TCGA 1992 Schedule 7AC paragraph 29?

Under paragraph 29 of Schedule 7AC, an 'interest in shares' means an interest held as a co-owner of those shares. This applies throughout the substantial shareholdings exemption schedule and covers any situation where a person has a co-ownership interest rather than being the sole owner of the shares.

What forms of co-ownership qualify as an interest in shares under the substantial shareholdings exemption?

Both joint ownership and ownership in common qualify as an interest in shares. Joint ownership means each co-owner has an undivided interest in the whole, while ownership in common means each co-owner has a distinct share. Either arrangement satisfies the definition under Schedule 7AC paragraph 29.

Do co-owners need to hold equal interests in shares for the definition to apply?

No, there is no requirement that co-owners hold equal interests. For example, one co-owner might hold a 70% interest and another a 30% interest. Both would still be regarded as having an 'interest in shares' for the purposes of the substantial shareholdings exemption schedule.

How does the interest in shares definition apply in practice under Schedule 7AC?

If two companies co-own shares in a third company as tenants in common with unequal interests, both companies have an 'interest in shares' for Schedule 7AC purposes. The definition applies regardless of the proportion held or the specific form of co-ownership arrangement used.

Taxation of Chargeable Gains Act 1992 section Sch 7AC para 29

Meaning of "interest in shares"

Section Sch 7AC paragraph 29 defines what is meant by an "interest in shares" for the purposes of the substantial shareholdings exemption schedule.

An "interest in shares" means an interest held as a co-owner of those shares
Co-ownership can take the form of either joint ownership or ownership in common
The co-owners do not need to hold equal interests in the shares
The definition applies throughout the schedule wherever the phrase "interest in shares" is used

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