Section 68 — Corporation Tax Act 2010: Share loss relief

Share loss relief 68 1 A company which has subscribed for shares in a qualifying trading company is eligible for relief under this Chapter (“share loss relief”) if—

a it incurs an allowable loss (for the purposes of corporation tax on chargeable gains) on the disposal of the shares in any accounting period, and b it meets the eligibility conditions (see section 69).

2 Subsection (1) applies only if the disposal of the shares is—

a by way of a bargain made at arm's length, b by way of a distribution in the course of dissolving or winding up the qualifying trading company, c a disposal within section 24(1) of TCGA 1992 (entire loss, destruction, dissipation or extinction of asset), or d a deemed disposal under section 24(2) of that Act (claim that value of the asset has become negligible).

3 Subsection (1) does not apply to any allowable loss incurred on the disposal if—

a the shares are the subject of an exchange or arrangement of the kind mentioned in section 135 or 136 of TCGA 1992 (company reconstructions etc),

and b because of section 137 of that Act, the exchange or arrangement involves a disposal of the shares.

4 For the meaning of “qualifying trading company”, see section 78.