Annex 1: Minor changes in the law Change 18: Share loss relief: nominees and bare trustees: section 77
This change makes clear that, if shares of the same class are held as to some directly by the company and as to the others by a nominee or bare trustee for it, all the shares are included in a single holding of the company for the purposes of section 76.
This change is the same as that made in section 149(3) of ITA for the purposes of relief against income tax. See Change 32 in Annex 1 to the explanatory notes on ITA.
A company which has subscribed for shares may subsequently wish to transfer the shares into the name of a nominee or bare trustee. On a disposal of the shares on behalf of the company by the nominee or bare trustee, the allowable loss for the purposes of corporation tax on chargeable gains and the entitlement to relief under section 573 of ICTA is that of the company not that of the nominee or bare trustee.
The effect of this change is to prevent the taxpayer from claiming a greater amount of relief or obtaining relief earlier than has hitherto been the case in practice, by advancing an argument that, where a company has beneficial holdings of shares one of which is held directly and the other of which is held through a nominee or bare trustee, the provisions of section 76 should be applied separately.
This change is adverse to some taxpayers in principle. But it is expected to have no practical effect as it is in line with generally accepted practice.