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CG50200 - Definitions meaning of a ‘share’
The Taxation of Chargeable Gains Act 1992 (TCGA92) uses a number of statutory definitions. This guidance looks at some of the more commonly used definitions. Other definitions will be given at the appropriate places elsewhere in the guidance.
Shares and shareholder rights
There is no statutory definition of a share. It therefore has its ordinary meaning which is a share in, a definite portion of, a company’s share capital. A company’s share capital consists of the funds subscribed to the company by its members, the shareholders. Shares represent the shareholders’ interest in or ownership of the company.
‘Group’ means a company which has one or more 51% subsidiaries, together with that or those subsidiaries.
This definition does not apply for the purposes of the trading or gross assets requirements of a qualifying trading company (ITA07/S137 and S142, and CTA10/S79 and S84, see VCM74610 and VCM75100): for those purposes ‘group’ means a parent company and its qualifying subsidiaries.
Holding company
‘Holding company’ means a company whose business consists wholly or mainly in the holding of shares or securities of companies which are its 51% subsidiaries.
Investment company
‘Investment company’ means a company whose business consists wholly or mainly in the making of investments and which derives the principal part of its income from the making of investments.
Claims which cannot be made in a return
Paragraph 59 FA 1998, applies Schedule 1A TMA to claims or elections that cannot be dealt with under Paragraphs 57 or 58, that is, by inclusion in a return as first made or by amendment. In particular, Schedule 1A applies to an election that does not relate to a particular AP and a claim made within the time limit for that claim but after the time limit for amendment of the return.
An election that does not relate to a particular AP may have effect in relation, for example, to a particular sort of income until it is withdrawn. Such an election is not tied to specific APs, takes effect from a particular date and remains in force until it is revoked. Any such claim or election falls within Schedule 1A in all circumstances.
With concerns over a potential rise in capital gains tax, and a removal or change in the qualifying conditions for business assets disposal relief, it has been reported some business owners are considering liquidating their companies ahead of the Budget on 3 March.