If ICTA88/S576 (1) applies you should compute the loss
qualifying for VC loss relief as below.
STEP 1
Prepare the CGT computation in the normal way. ICTA88/S576
(1) is only concerned with identifying the loss which qualifies for
VC loss relief. Any loss which does not qualify for ICTA88/S574
relief will be available as a capital loss.
STEP 2
Identify the shares disposed of (see
VCM47050) and the number of qualifying
and non-qualifying shares included in the disposal. This is a
question of fact. You may need to look at earlier part disposals
which have given rise to a gain in order to identify which shares
remain in the pool.
STEP 3
Calculate the loss which arises on the qualifying shares by
apportioning the total loss on a just and reasonable basis,
TCGA92/S52 (4). You make this apportionment by reference to the
number of qualifying and non-qualifying shares included in the
disposal.
STEP 4
Compare the apportioned loss in Step 3 with the actual cost
(or if a rebasing election has been made, the value at 31 March
1982 of the qualifying shares disposed of), see
VCM47100. The loss available for VC loss
relief is the lower figure.
The practical operation of ICTA88/S576 (1) is illustrated in
the following examples.
| Disposal of all the shares held - proportion of loss restricted | VCM47200 |
| Disposal of all the shares held - proportion of loss not restricted | VCM47250 |
| Part disposal | VCM47300 |
| Previous part disposal | VCM47350 |
| Same day acquisition of qualifying/non-qualifying shares | VCM47400 |
| Disposal where shares held include relief shares (see VCM47050) | VCM47450 |
