ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change is adverse to some taxpayers and favourable to others in principle. But it is expected to have no practical effect as it is in line with current practice. Change 33: Share loss relief: time of issue of shares transferred between spouses or civil partners: section 150
This change inserts an explicit provision determining the time at which shares issued to an individual (A) and transferred to A’s spouse or civil partner (B) are treated as issued to B.
Section 574(3)(b) of ICTA, which is rewritten as section 135(3) of this Act, treats shares subscribed for by A and transferred to B as having been subscribed for by B. See Changes 21 and 22.
The time at which such shares are treated as issued to B needs to be ascertained for the purposes of determining in relation to shares issued on or after 6 April 1998:
	the beginning of the period during which the company must carry on its business wholly or mainly in the United Kingdom (section 576(4)(c) of ICTA);
	the time at which the unquoted status requirement is to be met in accordance with section 293(1A) of ICTA as applied by section 576(4A) of that Act; and
	the time at which the gross assets requirement is to be met in accordance with section 293(6A) of ICTA as so applied.
Section 576(4)(c) of ICTA provides that the period begins one year before the shares in respect of which the relief is claimed are issued or, if later, the date of incorporation of the company. This links the beginning of the period to the date of issue of the shares to A.
In the other cases, no explicit link is made, but it is the practice, in those cases, also to treat the shares that are treated as subscribed for by B as having been issued to B at the time they were issued to A.
In order to provide an explicit link, section 150(2) applies for the purpose of determining:
	the beginning of the period during which the company must carry on its business wholly or mainly in the United Kingdom (section 134(5)(a));
	the time at which the gross assets test is to be conducted (section 142(1)(a) and (2)(a)); and
	the time at which the unquoted status requirement is to be met (section 143(1)).
As a consequence of the introduction of sections 145 and 146, it is necessary to determine the date on which the new shares are to be treated as having been issued for the purposes of section 146(2)(b). Accordingly, section 150(2) also applies for that purpose.