Section 131 — Income Tax Act 2007: Share loss relief

Share loss relief 131 1 An individual is eligible for relief under this Chapter (“share loss relief”) if—

a the individual incurs an allowable loss for capital gains tax purposes on the disposal of any shares in any tax year (“the year of the loss”),

and b the shares are qualifying shares. This is subject to subsections (3) and (4) and section 136(2).

2 Shares are qualifying shares for the purposes of this Chapter if—

a EIS relief is attributable to them, or b if EIS relief is not attributable to them, they are shares in a qualifying trading company which have been subscribed for by the individual.

3 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 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).

4 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.