Taxation of Chargeable Gains Act 1992 section 169R

Reorganisations involving acquisition of qualifying corporate bonds

Section 169R allows individuals who exchange shares for qualifying corporate bonds (QCBs) to elect to bring any chargeable gain into charge immediately, so that business asset disposal relief can be claimed at the time of the exchange rather than having the gain deferred.

• When shares are exchanged for QCBs (e.g. on a company takeover), the gain is normally deferred until the QCBs are disposed of, but this section allows an election to bring the gain into charge at the time of the exchange instead
• If the election is made, the individual can claim business asset disposal relief as though the exchange were an actual disposal of the original shares
• The election must be made by the individual, or jointly by the trustees and the qualifying beneficiary where trust business assets are involved
• The deadline for making the election is the first anniversary of the 31 January following the tax year in which the share-for-QCB exchange takes place