Annex 1: Minor changes in the law Change 22: Share loss relief: time of disposal: section 90
This change makes explicit the accounting period in which the disposal is to be treated as occurring for the purpose of share loss relief.
The availability of share loss relief is dependent upon an allowable loss being incurred for the purposes of corporation tax on chargeable gains and this can only be incurred on a disposal within the meaning given in TCGA.
The provisions of TCGA which determine when a disposal occurs, including in particular section 28 of that Act, do not apply to Chapter 5A of Part 13 of ICTA. But in practice “the accounting period in which the loss was incurred” referred to in section 573(2) of ICTA is taken to be the accounting period in which the disposal is made or treated as made for the purposes of corporation tax on chargeable gains in accordance with TCGA.
Section 90(7) contains explicit provision to this effect.This change is similar to that made in section 151(8) of ITA for the purposes of relief against income tax. SeeChange 35 in Annex 1 to the explanatory notes on ITA.
Although this change in principle affects the timing of relief and could be favourable to some taxpayers and adverse to others, it is entirely in line with generally accepted practice and so has no practical effect.