Taxation of Chargeable Gains Act 1992 Schedule 5BB paragraph 6

Transfers of shares to spouses and civil partners

Paragraph 6 deals with what happens when shares carrying SEIS re-investment relief are transferred between spouses or civil partners, and that relief is later withdrawn or reduced.

• Where an individual ("A") transfers SEIS relief shares to their spouse or civil partner ("B") during their lifetimes, and the transfer itself does not trigger a withdrawal of relief, this paragraph applies.
• The transfer must be one that is disregarded under ITA 2007 section 257FA(4), meaning it is a spouse or civil partner transfer that does not by itself cause SEIS relief to be withdrawn.
• If SEIS relief attributable to the transferred shares is subsequently withdrawn or reduced after the transfer, any chargeable gain that arises is charged on the recipient spouse or civil partner ("B"), not on the original investor ("A").
• This ensures that the capital gains tax consequence of a later withdrawal of SEIS relief falls on the person who actually holds the shares at the time, rather than on the person who originally subscribed for them.