CG50564 - Share identification rules: share disposals: CGT cases from 1998-99

TCGA92/S106A

For individuals and others within the charge to Capital Gains Tax on disposals of shares on or after 6 April 1998 TCGA92/S106A replaces the previous identification rules. For 1998-99 onwards, Section 106A provides that, for matching acquisitions and disposals of shares of the same class in the same company held in the same capacity

• the identification rules set out below apply, even if the particular shares were identified in some other way when they were disposed of, or when they were transferred or delivered to the acquirer
• earlier disposals must be matched with acquisitions before later disposals; any shares identified with an earlier disposal cannot therefore be identified with any later disposal
• disposals must be identified in the following order.

1. Against acquisitions on the same day, TCGA92/S105(1)(b),see CG50822.

2. Against acquisitions within the 30 days following the disposal, provided the person making the disposal was resident in the United Kingdom at the time of the acquisition if the relevant acquisition was on or after 22 March 2006, TCGA92/S106A(5) and (5A), see CG50566.

3. Against acquisitions preceding the disposal, but after 5 April 1998, on a last in first out (LIFO) basis, TCGA92/S106A(6) , see CG50579.

4. Against shares in a Section 104 holding, but without identifying any particular shares in that holding, TCGA92/S106A(6) and (7), see CG50590 onwards.

5. Against shares in a 1982 holding, but without identifying with any particular shares in that holding, TCGA92/S106A(6) and (7), see CG50870 onwards.

6. Against shares held on 6 April 1965, again on a LIFO basis, TCGA92/S106A(6), see CG50970 onwards.

7. Finally against acquisitions following the disposal (and not already identified under stage 2 above), taking the earliest acquisition first, TCGA92/S105(2).