IHTM18333 - Investments on alternative markets: business relief

NASDAQ (IHTM18340) shares are listed and do not qualify for business relief (IHTM25131) after 10 March 92.

The same applies for the separate exchange NASDAQ Europe (IHTM18341), until 28 November 01. From this date, shares traded on NASDAQ Europe are no longer recognised as listed and so can qualify for business relief.

The following instructions relate only to AIM, (IHTM18336) OFEX (IHTM18337) and USM (IHTM18339) traded shares, and to NASDAQ Europe shares from 28 November 01.

(Review the separate instructions for Rule 4.2(a) (IHTM18338) shares.)

Transfers after 6 April 96 (28 November 01 for NASDAQ Europe)

Many companies on alternative markets qualify for business relief and PC&S have a list of many of the appropriate companies.

• If the company is on this qualifying list they will flag the investment “100% BR”.
• If the company is not on the list they will flag “Qy BR”.

“100% BR”

Check with the taxpayer whether the shares have been owned for two years prior to the date of valuation (if it is not stated l), and if so, allow relief at 100%.

“Qy BR”

If PC&S have not highlighted the holding as being on their list of companies attracting 100% BR, or have noted “Qy BR”,

• send a memo to SAV (Information Support) asking whether business relief should be due. (Unless it is clear from the name that it will not qualify, such as A&B Property Investment Company Plc.)

On the memo you need to state

• the market in which the shares were held
• the name of the company
• the precise number and description of shares
• what, if any, business relief is claimed,
• whether you know if the two year ownership requirement is satisfied.

If Shares and Assets Valuation inform you that the company’s activity qualifies the shares for 100% business relief you must check whether the two year ownership requirement is met, with the taxpayer if necessary, before allowing the relief.

Transfers before 6 April 96

Business relief may be available at a lower rate (50% or 30%).

• Send a memo to Shares and Assets Valuation (Information Support) giving the above information.
• Ask whether business relief should be due, and if so, at what rate.

Again, check whether the two year rule is satisfied before allowing any relief.

See the separate advice for USM shares (IHTM18339) prior to 10 March 1992.