were substituted for “10% and “qualifying shareholding “group were substituted for “75 per cent or “chargeable asset F1SCHEDULE 7AC Exemptions for disposals by companies with substantial shareholding Textual Amendments F1 Sch. inserted (with effect in accordance s. 44(3)(4) of the amending Act) Finance Act 2002 (c. 23) 8 para. 1 Part The exemptions main exemption 1(1)A gain accruing to a company (“the investing company”) on disposal shares or an interest another invested in”) is not chargeable if requirements this Schedule are met. (2)The set out in— 2 (the requirement) and 3 (requirements be met relation F2... in). (3)The conferred paragraph does apply circumstances specified 5 cases 6. F2 Words 1(2) omitted 27(6) virtue (No. 2) 2017 32) 27(2)(a) Subsidiary exemption: asset related where conditions 2(1)A (“company A”) B”) either following first condition that— (a)immediately before A holds B (b)any at that time would 1 gain. second hold B but member group (b)if A rather than other company held interest any (4)Where assets vested liquidator under section 145 Insolvency 1986 Article 123 (Northern Ireland) Order 1989 otherwise applies as were in acts of (acquisitions from him being disregarded accordingly). (5)The previously 3(1)A shares are— (a)that meets requirement 7 requirement) B (b)that allowable loss apart paragraph accrue F3... (c)that disposal— (i)company resident United Kingdom (ii)any F4would corporation tax result 2B(3) (4) (d)that there was within period two years ending relevant period”) when if— (ii)a same had disposed it then held have been gain (e)that 19 relating in) when controlled by— (ii)company together persons connected it (iii)a (iv)any such it. F5(3). . (4)In determining purpose sub-paragraph (2)(d) whether hypothetical referred would gain F6... 19(1)(b) (requirement immediately after disposal) shall assumed (5)Where— asset (b)the expenditure computing disposal fall reduced because claim relief 165 (gifts relief) earlier took place period (1) prevent so loss. (6)Where (5)(a) company. (7)In “the period” purposes (e) (5)(c) 28 (time contract) omission subsection (2) (postponement case conditional contract). (8)The F3 3(2)(b) 27(2)(b)(i) F4 3(2)(c)(ii) substituted paras. 120 2019 1) 92 F5 3(3) 27(2)(b)(ii) F6 3(4) 27(2)(b)(iii) F7Subsidiary qualifying institutional investors F7 3A 3B cross-heading 28(7) 28(2) 3A(1)This in”). (2)This (a)the (substantial shareholder in) (c)the disqualified listed (3)If 80% more ordinary share capital owned investors no accrues disposal. (4)If least 25% less amount percentage which investors. (5)A “disqualified company” (a)any forming part recognised stock exchange investor UK REIT (6)In (5)(c) “qualifying REIT” means meaning 12 CTA 2010 which— (a)meets 528(4)(b) (company close having investor participant) (b)by 443 (companies behalf Crown) treated 3B(1)This 3A. (2)A person “owns” owns it— (a)directly (b)indirectly (c)partly directly partly indirectly. (3)Sections 1155 1157 (meaning “indirect ownership” calculation amounts indirectly) (2). (4)For sections applied (3)— (a)ordinary may through company (b)treat references body corporate including exempt unauthorised unit trust (and capital trust units trust). also regarded owning paragraphs 13 Schedule holding partnership include each partner proportion equal partner's proportionate capital. “exempt trust” has Unauthorised Unit Trusts (Tax) Regulations 2013 (SI 2013/2819). Application priority provisions deeming etc 4(1)For applies question determined without regard to— (a)section 116(10) (reorganisation conversion securities involving disposal) (b)section 127 (share reorganisations (c)section 192(2)(a) (distribution distribution). (2)Sub-paragraph its applying attributable 15 2000 (corporate venturing scheme) withdrawn 46 (withdrawal reduction investment shares). (3)Where extent apply— mentioned (1)(a) (b) do provision (1)(c) subject matter disapplied (3)(a) otherwise 84 scheme: exchanges) 85 (attribution new shares) apply. (5)In reference includes enactment tax. Circumstances 5(1)Where pursuance arrangements applies— (a)an untaxed B”) (b)before accrual gain— acquired control both companies (ii)there significant change trading activities affecting persons none sole benefit (but paragraph) could expected arise (3)For “untaxed” all substantial represents profits brought into account (in Kingdom elsewhere) date (4)The (3) where— respect those apportioned 747 Taxes 1988 (imputation foreign companies) (b)a sum (4) accounting (5)For (1)(b)(ii) “significant B” (a)there major nature conduct trade carried 51% subsidiary (b)there scale (c)company begins carry trade. paragraph— “arrangements” scheme agreement understanding legally enforceable “major trade” F8section 673 2010 (change ownership company: disallowance losses) “profits” income gains (including unrealised gains). F8 5(6) 1184(1) Corporation Tax 4) 1184(1) 269(2) Other excluded 6(1)The (a)to deemed consideration making (b)to contained (c)to F9any 116 118 2012 (deemed transfer insurance one category another). 2(2)(b) (3)(b) 3(2)(d) (1)(a) (c) above. F9 6(1)(c) (17.7.2012) 2012 14) 16 88(2) Modifications etc. (not altering text) C1 6 2009 782A(3) (as 26(5) 26(3)) 7The must throughout twelve-month beginning F10six day takes place. F10 Word 27(3) Meaning “substantial shareholding" 8(1)For shareholding” interests (a)it 10% company’s (b)it beneficially entitled available distribution equity holders (c)it winding up holders. This prejudice what meant “substantial” word appears contexts. F11(2)Chapter (group relief: distribution) 157(1) Act F12but (a)in 158 inserted— “(2A)But carrying business banking loan creditor debt issued incurred money lent course business.” (b)sections 171(1)(b) (3) 173 174 176 181 omitted. F11 8(2) 8(2)(3) 269(3) F12 retrospective art. S.I.) (Amendment) (S.I. 2010/2902) arts. 1(1) 2(3) F138A(1)This cost acquisition £20000000 company— (i)is (ii)would (3)In (2)— “cost” value consideration money's worth given wholly exclusively incidental costs acquisition “proportionate percentage” (2)(a). (2)(a) single series acquisitions. (5)If— actual percentage”) is be (2)(b)(i) (ii) percentage (b)having bears difference can reasonably insignificant meeting be). (6)Paragraph (owning capital) (1). (7)Paragraph (8)In “ordinary shares” in. F13 8A 28(3) Aggregation holdings 9(1)For F14paragraphs 8A(2) treated— (a)as group (b)as entitlement rights enjoyed shares. 17(4) (exclusion aggregation long-term fund company). F14 9(1) 28(4) C2 9 modified (24.2.2022) 2022 3) 17(5)(a) C3 34(2)(a) Effect no-gain/no-loss 10(1)For extended during concerned they derived held— (a)by concerned transferred first-mentioned no-gain/ no-loss transfer previous transfer— (i)to (a) (ii)to paragraph. (2)For (1)— (a)a “no-gain/no-loss transfer” corresponding disposal no-gain/no- 171 (transfers group) F15subsection (1A) or section. extend entitlement— or derived. attributed (aggregation companies). except (a) (6) “shares” (6)For “derived” only becomes co-owner alone vice versa changes (without ceasing co-owner) (c)one another (d)there sequence occurrences (c). F15 10(2)(b) 27(4) reacquisition 11(1)For if of— (b)shares “deemed reacquisition” immediate taking tax 10. C4 11 22(8) C5 34(2)(b) C6 31(4) C7 17(6) repurchase F1612(1)This borrower”) sells arrangement borrower debtor repo 2007 (sale securities) sale ignored gains. force— continuing accordingly retaining attaching them lender becoming rights. qualification. (3)If end borrower holder— (a)of (b)of indirectly representing represented them. (4)Expressions used Schedule. F16 comes force 1.10.2007) 11) 47(4) 14 13 S.I. 2007/2483 lending 13(1)This transfers arrangement 263B(2) (stock arrangements) enactments (2)During arrangement— his attached lender transferred “stock arrangement” between borrower” lender”) way sale imposed back sale. (5)Any ending— (a)with (b)when apparent make will complied with. (6)The 263B— (a)subsections (5) (6) (references securities description) 263C payment redemption). reconstruction 14(1)This X”)— (a)are exchanged (or exchanged) Y”) (b)are 136 X that 135 136 original asset. (2)Where Y— (a)is falls met (b)is which (c)is (effect demerger) instead times exchange exchange) X. 15) “original “new holding” construed 126 127 136. demerger 15(1)This subsidiary”) parent demerger. subsidiary— etc) “transfer demerger” 192(2)(b) 126 130 reorganisation acquisition. F17Effect F17 15A 10 2011 6(2) 15A(1)For Part (a)that (c)that and different members (other member. F18(2A)For (2)(b) (d) “trade” oil gas exploration appraisal. final month (if did time). (4)“The months disposal. F18 15A(2A) 72(2) 2014 26) 72(1) liquidation 16Where Special rules F19insurance business F19 17 88(8) 17(1)In 8(1) shareholding) (c) “30%. F20held business. F21for shares— (i)in (ii)in (b)(ii) F22Chapter 24 (subsidiaries). companies) F23for F24(4A)The F25held business sub-paragraphs F26for F27an formed fixed question. F28(5). F20 17(2) 88(4) F21 17(3)(b) 88(5) F22 17(3) 269(4) F23 88(6) F24 17(4A) 2(5) F25 88(7)(a) F26 88(7)(b) F27 88(7)(c) F28 17(5) repealed 14(5)(b) 27 Pt. 2(10) C8 Friendly Societies (Modification Acts) 1997 1997/473) reg. 50A (30.1.2003) 2003/23 regs. 9) Requirements F29... F29 heading 27(2)(c) F3018. F30 18 preceding 27(2)(d) 19(1)The must— (a)have period— (i)beginning start latest (ii)ending (b)F31in 1A) applies F32(1A)This 15A. subgroup. F33(2A)If 15A(2)(b) (d) (2B) satisfied. (2B)The 15A(2)(d) (2C)“The 15A(4). 28(1) (asset made conveyed conveyance transfer. F34(4)Section 1122 “connected” persons) (1A)(a). F31 27(5)(a) F32 19(1A) 27(5)(b) F33 19(2A)-(2C) 6(3) F34 19(4) 27(5)(c) C9 19(1) 17(5)(b) C10 34(2)(c) “trading company" 20(1)In whose activities. activities” (b)for preparing on (c)with view acquiring starting trade (d)with subgroup (ii)if group. (3)Activities qualify (2)(c) unless made be) starts soon practicable circumstances. (a)such (b)such give joint venture group" 21(1)In group” group— (a)one activities members taken together (ii)is intra-group activities). subgroup" 22(1)In subgroup” subgroup— subgroup intra-subgroup Treatment 23(1)This (2)In (a)its disregarded appropriate proportion— (i)of (ii)where subsidiaries. F35... (a)every (b)each subsidiaries (2)(b) (4)(b) “an proportion” concerned. “shares” (7)For (so F35 23(3) 27(2)(e) “joint 24(1)For five fewer who them 75% In (b) Schedule— capital (i)it (ii)the reconstruction 25The (a)paragraph (b)paragraph demerger) requirement). 4 Interpretation “company expressions 26(1)In (a)“company” 170(9) (b)references membership 170 read “51 per cent. (2)References “subgroup” form fact “holding company”— described principal group (b)in “51% subsidiary” F36Chapter 2010. F37that Chapter F38registered society (see 1119 Act) (5)References “group” “subsidiary” necessary modifications incorporated law country territory outside Kingdom. F36 26(4) 269(5)(a) F37 269(5)(b) F38 (1.8.2014) Co-operative Community Benefit 154 53 5) amended 39 7 15) “trade" 27In anything profession vocation Income Acts conducted commercial basis realisation profits. “twelve-month period" 28For anniversary began. “interest shares" 29(1)References (2)It jointly common co-owners equal. “asset 30(1)This explains (2)An is— option acquire dispose security holder become (whether otherwise)— (i)shares (ii)an (iii)another falling (c)an security (d)an over (e)any taken— relating indirectly question regards came existence negligible likelihood due exercised extent. 29 F39Meaning investor” F39 30A 28(5) 30A(1)In G below. APension schemes trustee manager registered pension investment-regulated (b)an overseas scheme scheme. “Investment-regulated scheme” 29A 2004. “Overseas Act. BLife assurance businesses life business “Life business” 56 2012. Section 137 forms CSovereign wealth funds cannot liable relevant) ground sovereign immunity. DCharities charity. EInvestment trusts An trust. FAuthorised authorised genuine diversity made. “Authorised fund” Authorised Investment Funds 2006 2006/964). Regulation 9A (genuine ownership) purpose. GExempt trustees (treating Treasury regulations amend add remove particular changing investor). Index defined 31In below explained indicated: shares paragraph 30 company paragraph 26(1)(a) in paragraph F40Exempt trust paragraph 3B(7) subsidiary paragraph group) paragraph 26(1)(b) 26(3) 24(1) F40Qualifying investor paragraph 30A company) paragraph 24(2) subgroup paragraph 26(2) trade paragraph 20 group paragraph 21 22 period paragraph F40 31 28(6) Consequential “chargeable 32Any shares” asset” Negligible claims 33(1)This makes (assets value) exercise specify sold reacquired subsection. (3)This Reorganisations etc: over transaction 34(1)The affect 116(10)(b) (reorganisations conversions reconstructions: transaction). F41(2). F42(2)Sub-paragraph occurred January 2005) 92(7) 1996 (convertible relationships). F41 34(2) 1329(1) 1329(1) 386 Pts. F42 2010/614) Recovery charge postponed non-resident F4335. F43 35 37(3) 13) 37(2) Appropriation 36(1)Where— appropriated commencement otherwise) market value accrued thereby value. (2)Section 173 group: stock) 161 (appropriations stock). held-over gifts 37(1)This disposes (c)by (3)An “appropriate just reasonable 165. “held-over gain” Degrouping: 38(1)Where— degrouping”) 179(3) degrouping time provided degrouping. (2)Where— time”) satisfy 179(7) 179(6) time. (3)Any event