Section 169VB — Taxation of Chargeable Gains Act 1992: Qualifying shares, potentially qualifying shares and excluded shares

Qualifying shares, potentially qualifying shares and excluded shares 169VB 1 Where there is a disposal of all or part of (or of an interest in) a holding of shares in a company, this section applies to determine whether a share which is in the holding at the time immediately before the disposal (“ the relevant time ”) is for the purposes of this Chapter—

a a qualifying share, b a potentially qualifying share, or c an excluded share.

2 The share is a “qualifying share” at the relevant time if—

a the share was subscribed for, within the meaning given by section 169VU, by the person making the disposal (“the investor”),

b the investor has held the share continuously for the period beginning with the issue of the share and ending with the relevant time (“the share-holding period”),

c the share was issued on or after 17 March 2016, d at the time the share was issued, none of the shares or securities of the company that issued it were listed on a recognised stock exchange, e the share was an ordinary share when issued and is an ordinary share at the relevant time, f the company that issued the share—

i was a trading company or the holding company of a trading group (as defined by section 169VV) when the share was issued, and ii has been so throughout the share-holding period, g at no time in the share-holding period was the investor or a person connected with the investor a relevant employee in respect of that company (within the meaning given by section 169VW),

and h the period beginning with the date the share was issued and ending with the date of the disposal is at least 3 years.

3 The share is a “potentially qualifying share” at the relevant time if—

a the conditions in subsection (2)(a) to (g) are met, but b the period beginning with the date the share was issued and ending with the date of the disposal is less than 3 years.

4 The share is an “excluded share” at the relevant time if it is, at that time—

a not a qualifying share, and b not a potentially qualifying share.

5 This section is subject to Schedule 7ZB (disqualification of share where value received by investor).

6 In relation to a share issued on or after 17 March 2016 but before 6 April 2016, any reference in subsection (2)(h) or (3) to “3 years” is to be read as a reference to the minimum period.

7 In subsection (6) “ the minimum period ” means the period of 3 years extended by a period equal in length to the period beginning with the date the share was issued and ending with 5 April 2016.