Taxation of Chargeable Gains Act 1992 section 217

Shares, and rights to shares, in successor company

Section 217 sets out the capital gains tax treatment of shares and rights to shares received by members of a building society when the society's business is transferred to a successor company.

• Rights conferred on members to acquire shares (whether at a discount, with priority, or for free) are treated as options acquired for no consideration and having no value, so no immediate tax charge arises on the grant of those rights.
• Shares received by members directly from the successor company or the society are treated as acquired at a cost equal to any genuinely new consideration paid by the member — if no new consideration is given, both the cost and value are nil.
• Where shares are placed into a trust for later transfer to members, the trustees are treated as acquiring them for nothing, the members' interests in the trust have no cost or value, and when a member becomes absolutely entitled the shares are deemed disposed of and reacquired at no gain and no loss.
• Any gains arising when the society itself disposes of shares in the successor company as part of the transfer are exempt from capital gains tax.