Taxation of Chargeable Gains Act 1992 section 169SD

Supplementary election to defer gains until subsequent disposal

Section 169SD allows an individual who has made an election under section 169SC (treating shares as notionally disposed of when a company ceases to be their personal company) to make a further election to defer the resulting gain until an actual disposal of the shares or securities takes place.

• An individual can elect to defer any chargeable gain arising on the notional disposal, so that no gain or loss accrues at that point; instead, a calculated gain will crystallise when shares or securities are actually disposed of later.
• The deferred gain is allocated across each class of shares or securities in proportion to the relevant gains arising on the notional disposal, and then apportioned to the shares actually disposed of by reference to their nominal value relative to the total nominal value of that class in the notional disposal.
• The gain treated as accruing on any subsequent disposal is capped so that cumulative gains recognised across all disposals of a particular class of shares or securities never exceed the total deferred gain originally attributed to that class.
• Where the subsequent disposal arises from a capital distribution treated as a disposal under section 122, the individual is treated as disposing of the entire nominal value of that class for the purpose of calculating the apportionment, meaning the full deferred gain for that class is brought into charge.