VCM26030 - EIS: income tax relief: meaning of disposal

ICTA/S312 (3); ICTA/S299 (8); ITA/S254; ITA/S211

’Disposal' is not defined in the legislation and therefore has its ordinary dictionary meaning; it covers transfers for any kind of consideration or none - not only sales but also gifts and exchanges for other shares. Cessation of ownership by reason of death does not involve any disposal.

The rules cover not only outright disposals of shares but also disposals of any interest in or right over shares. This includes the grant to someone else of an option to buy the shares (a call option).

In addition, where an individual, although not in fact disposing of his shares, is treated by TCGA92/S136 (1), (see CG52700 onwards), as exchanging them for other shares, he is treated as disposing of them.