VCM48250 - VC loss relief: special rules for share reorganisations: no new consideration given for new shares: general

ICTA88/S575 (2)(a)

If no new consideration was given for the new shares, ICTA88/S574 relief will only be due if relief could have been given on the old shares at the time of the share reorganisation. For this purpose, you should assume that the rules of ICTA88/S574 have always existed.

For example, if shares in a non-qualifying company are exchanged for shares in a qualifying company ICTA88/S574 relief will not be available on a disposal of the new shares. This is so even though the new shares are shares in a qualifying trading company.

But if a qualifying trading company makes a bonus issue of shares the new shares will qualify for relief, see VCM48300.