Corporation Tax Act 2010 section 76

Disposal of shares forming part of mixed holding

Section 76 sets out the rules for identifying which shares are being disposed of when a company sells shares from a mixed holding — that is, a holding that includes both shares capable of being qualifying shares (for loss relief purposes) and shares that are not capable of being qualifying shares.

• A mixed holding is one that contains both shares that are not capable of being qualifying shares and other shares; when a company disposes of shares from such a holding, this section determines whether qualifying shares are being sold and, if so, which ones
• In most cases, the shares disposed of are identified using the standard capital gains tax share identification rules, and where shares form part of a section 104 holding or 1982 holding, disposals are treated as relating to shares acquired later rather than earlier
• Where the mixed holding includes shares to which corporate venturing scheme investment relief is attributable and which have been held continuously since issue, special identification rules from that scheme apply instead
• If the identification question cannot be resolved under any of the specific rules, it must be determined on a just and reasonable basis — this is particularly relevant where qualifying and non-qualifying shares were acquired on the same day

---