Taxation of Chargeable Gains Act 1992 section 236S

Identification of shares where section 236H or 236Q applies

Section 236S allows trustees of an employee ownership trust to choose which shares they are treating as disposed of when they hold a mix of CGT-exempt shares and other shares of the same class.

• Where trustees hold both "EOT exempt shares" (shares acquired with CGT relief under the employee ownership trust rules) and other shares of the same class, these two pools are kept separate rather than being merged under the normal share pooling rules.
• When the trustees sell some but not all of their shares, they may choose what proportion of the shares sold are EOT exempt shares, up to the total number of EOT exempt shares they hold before the sale.
• Shares are only considered to be of the same class if they would be treated as such by a recognised stock exchange.
• This flexibility does not apply where the disposal is a deemed disposal triggered by a disqualifying event — in that case, the trustees cannot choose which shares are treated as sold.