Taxation of Chargeable Gains Act 1992 section 169VN

Reorganisations where no consideration given

Section 169VN sets out how the investors' relief status of shares is preserved when a company reorganises its share capital and the shareholder does not give any consideration for the new shares received.

• When a company reorganises its share capital and a qualifying person receives new shares without giving any consideration, special rules determine the investors' relief status of those new shares on a later disposal.
• The new shares are treated as inheriting the history of the original shares — they are deemed to have been subscribed for on the same date and held continuously for the same period as the original shares they replaced.
• An "appropriate number" formula (set out in section 169VO) is used to allocate the qualifying, potentially qualifying or excluded status of the original shares across the new shares in the correct proportions.
• The section only applies where no consideration at all is given for the new holding; where consideration is given, different rules apply.