ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is in taxpayers’ favour in principle. But it is expected to have no practical effect as it is in line with current practice.
Change 22: Share loss relief: transfer of shares between spouses or civil partners: time at which spouses or civil partners are living together: section 135
This change makes it explicit that, if shares are transferred between spouses or civil partners, they must be living together at the time of the transfer but need not have been spouses or civil partners at the time of the subscription for the shares.
Section 574(3)(b) of ICTA provides that:
“an individual shall be treated as having subscribed for shares if his spouse or civil partner did so and transferred them to him by a transaction inter vivos.”
Section 576(5) of ICTA provides that:
““civil partner” refers to one of two civil partners who are living together (construed in accordance with section 282)“spouse” refers to one of two spouses who are living together (construed in accordance with section 282)”
Section 574(3)(b) of ICTA does not provide explicitly that the only time relevant for the purpose of determining whether the transferor and transferee are living together is the time of the transfer. In practice, however, this is how it has been applied.
Section 135(3)(c) (read with the definitions of “spouse” and “civil partner” in section 151(1)) makes this explicit. Section 1011, which rewrites section 282 of ICTA, explains the meaning of “living together”.