Taxation of Chargeable Gains Act 1992 section 105

Disposal on or before day of acquisition of shares and other unidentified assets

Section 105 establishes how shares of the same class that are both acquired and disposed of by the same person on the same day are matched for capital gains tax purposes, and provides special treatment for shares acquired through Enterprise Management Incentive (EMI) options.

• Where the same person acquires and disposes of shares of the same class on the same day and in the same capacity, all acquisitions are treated as a single transaction and all disposals as a single transaction, with disposals matched first against same-day acquisitions.
• If the number of shares disposed of exceeds those that can be matched against same-day acquisitions, shares acquired after the disposal under the bed and breakfast rule, or shares in the section 104 pool, the excess disposal is treated as reducing shares acquired in the future, starting with the earliest future acquisition.
• Shares that are matched with other shares under these same-day rules do not form part of, and cannot constitute, a section 104 share pool.
• Where an individual acquires shares of the same class on the same day and some are relevant EMI shares, the EMI shares are treated as acquired in a separate transaction and are deemed to be disposed of only after the non-EMI shares have been disposed of first.