Taxation of Chargeable Gains Act 1992 Schedule 2 paragraph 4

Election for pooling

Section 4 of Schedule 2 allows holders of quoted securities held on 6 April 1965 to elect to treat them as a single pooled asset, with gains and losses calculated by reference to their 6 April 1965 market value (or, from 2008–09 onwards, their 31 March 1982 value).

• Holders of quoted securities that were not already part of a 1982 holding may elect to pool those securities, so that all securities of the same class held by one person in one capacity are treated as indistinguishable parts of a single asset that grows or shrinks as securities are acquired or disposed of.
• Two separate elections are available — one covering quoted securities other than fixed-interest securities and preference shares, and the other covering fixed-interest securities and preference shares — and a person may make both elections, but each is irrevocable and applies to all disposals of the relevant type made after 19 March 1968.
• The election must be notified to an officer of HMRC within two years from the end of the accounting period in which the first relevant disposal of the type of security concerned was made, although HMRC may allow a longer period; intra-group transfers on a no-gain/no-loss basis count as disposals for the purpose of starting this time limit, and the treatment of the securities on a subsequent disposal by the transferee depends on whether the transferor made an election.
• An election made in respect of securities held in one capacity does not extend to securities held in another capacity, and the election does not affect the manner in which the market value of any asset is determined; all necessary tax adjustments — including repayments and additional assessments — must be made to give effect to the election.