Section 169VS — Taxation of Chargeable Gains Act 1992: Modification of conditions for being a qualifying share

Modification of conditions for being a qualifying share 169VS 1 This section applies where—

a an ordinary share (“the original share”) is subscribed for by a qualifying person (“the investor”);

b the conditions in section 169VB(2)(c) and (d) are met in relation to the original share, c the share is involved in an exchange of shares treated under section 169VQ or 169VR as a reorganisation of share capital, and accordingly is included in the original shares within the meaning of section 169VN(6),

and d subsequently there is a disposal of all or part of a holding of shares that in relation to that exchange is a new holding within the meaning given by section 169VN(2).

2 As respects a share which is in that holding immediately before that disposal, the conditions in section 169VB(2)(f) and (g) are to be regarded as met if (and only if)—

a in relation to the period beginning with the issue of the original share and ending with the exchange of shares, those conditions were met by the original share, and b in relation to the period beginning with the exchange of shares and ending with the disposal, those conditions were met by a share representing the original share.

3 Accordingly—

a in section 169VB(2)(f) and (g) as they apply to the original share, any reference to the share-holding period is to be read as to the period mentioned in subsection (2)(a) above, and b in section 169VB(2)(f) and (g) as they apply to a share representing the original share, any reference to the share-holding period is to be read as to the period mentioned in subsection (2)(b) above.

4 In subsection (1)(c) “ the share ” includes a share that, following a reorganisation or following an exchange of shares in relation to which section 169VQ or 169VR applies, represents the original share, and subsections (2) and (3) apply in such a case with the necessary modifications.