Taxation of Chargeable Gains Act 1992 section 105A

Shares acquired on same day: election for alternative treatment

Section 105A allows an individual who acquires shares through a tax-advantaged employee share scheme on the same day as acquiring other shares of the same class to elect for a special ordering rule that keeps the two groups of shares separate for capital gains tax purposes.

• Where an individual acquires shares of the same class on the same day through both a tax-advantaged share scheme (such as EMI, SAYE or CSOP) and through other means, they may elect for those shares to be treated as two separate acquisitions rather than being pooled together.
• If the election is made, the non-scheme shares are treated as disposed of before the tax-advantaged scheme shares, which generally reduces the immediate capital gains tax charge because the non-scheme shares typically have a higher base cost.
• The election must be made when the individual first disposes of any of the shares in question, and once made it applies to that disposal and all subsequent disposals of those shares; the deadline for making the election is one year and ten months after the end of the tax year in which the first disposal occurs.
• The election applies only to the specific class of shares acquired on a particular day, so the individual can choose separately whether to make an election for shares of a different class, in a different company, or acquired on a different day.