Taxation of Chargeable Gains Act 1992 section 169VH

Disposals by trustees: further conditions for relief

Section 169VH sets out the additional conditions that must be met before investors' relief can apply when shares are disposed of by the trustees of a settlement, rather than by an individual investor directly.

• Investors' relief on a disposal of shares by trustees only applies if at least one beneficiary of the settlement qualifies as an "eligible beneficiary" in respect of that disposal.
• To be an eligible beneficiary, an individual must have held an interest in possession in the settled property (including the shares being disposed of) continuously for the three years ending on the date of disposal, and must not have been an employee or officer of the company that issued those shares at any point during that period.
• The individual must actively elect to be treated as an eligible beneficiary by notifying the trustees before the claim is made, though this election can be withdrawn at any time up until the claim is submitted.
• An interest in possession held for a fixed term does not count, and any reference in the qualifying shares rules to "the investor" is read as a reference to any trustee of the settlement.