Taxation of Chargeable Gains Act 1992 section 150

Business expansion schemes

Section 150 sets out the capital gains tax treatment of shares on which income tax relief was given under the Business Expansion Scheme (BES) or the earlier Business Start-Up Scheme (BSS).

• Gains or losses on BES shares issued after 18 March 1986, where relief has been given and not withdrawn, are completely exempt from capital gains tax
• For shares issued before 19 March 1986, a capital loss may be restricted by the amount of unwithdrown relief, but the shares remain within the charge to capital gains tax
• Normal share pooling and identification rules do not apply to BES/BSS shares; instead, disposals are matched on a first-in, first-out basis, with BSS shares identified before BES shares, and BES shares before other shares
• Share reorganisations, exchanges and rights issues are subject to special rules that keep BES relief shares separate from other holdings, and share-for-share exchange treatment generally only applies if the relief has been withdrawn or specific conditions are met