CG58205 - Deferred consideration: shares/securities: Notifications made prior to royal assent
FA97/S89 (7)
Where a claim under ESC/D27 made before 26 November 1996 is treated as an election under TCGA92/S138A (CG58204), FA97/89 (7) provides that the election has no effect in relation to the disposal before 26 November 1996 of any asset which
- was issued to any person in pursuance of an earn-out right,
- was issued to any person in pursuance of a replacement earn-out
right within TCGA92/S138A (4) (CG58089), or
- for TCGA purposes is treated as the same as an asset issued at
any time to any person in pursuance of a right under a) or b)
above, but is not an asset first held by that person before that
time. This covers the case where, for example, shares acquired in
satisfaction of an earn-out right are replaced by a later holding
of shares in a reorganisation to which the same asset fiction in
TCGA92/S127 applies, see CG51700; and there is a disposal of the
later holding.
FA97/S89 (7) has the effect that where a taxpayer has claimed the benefit of the concession before 26 November 1996 (and they cannot claim the concession thereafter because it was withdrawn on that day) the full TCGA92/S138A regime does not apply in relation to disposals before 26 November 1996 of the assets listed. These cases are covered solely by the wording of ESC/D27, subject to FA97/S89 (8), see CG58206.
