Taxation of Chargeable Gains Act 1992 Schedule 8A paragraph 3

Section 37 operates to exclude part of the consideration

Schedule 8A paragraph 3 deals with how the restriction in section 37 interacts with the substantial shareholding exemption when only part of the disposal consideration is excluded from the chargeable gains computation.

• Where section 37 applies to reduce the consideration for a disposal, this paragraph adjusts how the substantial shareholding exemption operates in relation to that disposal.
• The effect is that only the net consideration — after the section 37 reduction — is taken into account when determining the gain or loss eligible for the exemption.
• This ensures that amounts already excluded from the computation under section 37 are not also covered by the substantial shareholding exemption, preventing a double benefit.
• The paragraph was introduced by Finance Act 2010 and subsequently amended by Finance Act 2012 to refine how these two relieving provisions interact.