Taxation of Chargeable Gains Act 1992 section 169VS

Modification of conditions for being a qualifying share

Section 169VS modifies how the qualifying share conditions are tested when shares have gone through a reorganisation or reconstruction before being disposed of, ensuring the investors' relief conditions are checked across each stage of the share's history.

• Where shares in a new holding (resulting from a reorganisation or reconstruction) are disposed of, the qualifying share conditions must be tested in two separate stages rather than as a single continuous period.
• The first stage tests whether the original share met the relevant conditions from the date it was issued up to the date of the reorganisation or reconstruction.
• The second stage tests whether the replacement share (representing the original share) met the same conditions from the date of the reorganisation or reconstruction up to the date of disposal.
• If there have been multiple reorganisations or reconstructions, each stage in the sequence is tested independently, and the conditions must be satisfied at every stage.