Taxation of Chargeable Gains Act 1992 section 106A

Identification of securities: capital gains tax

Section 106A sets out the share identification rules for capital gains tax purposes, establishing the order in which shares and securities disposed of must be matched against acquisitions of the same class.

• When you sell shares, they must be matched against purchases in a strict order: first same-day acquisitions, then acquisitions within the following 30 days, then the section 104 pool, and finally later acquisitions on a first-in, first-out basis
• The 30-day "bed and breakfast" rule does not apply where the seller acquires replacement shares at a time when they are not UK resident or are Treaty non-resident, and shares matched under this rule do not form part of the section 104 pool
• Relevant EMI shares receive special treatment: on disposal they are treated as sold before other shares on a first-in, first-out basis, and they are kept outside the section 104 pool; when matching under the 30-day rule, non-EMI shares are matched before EMI shares
• These identification rules apply for capital gains tax only (not corporation tax), override any other method of identifying the particular shares disposed of or transferred, and only match shares of the same class held in the same capacity