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TCGA92/S107 (3)

»Ê¹ÚÌåÓýapp Section 104 holding rules, see CG51620+, do not apply in the following circumstances.

• A company acquires shares which would otherwise create or be added to a Section 104 holding.
• Within ten days it makes a disposal of shares of the same class in the same company.

In that case the disposal is identified against the acquisition within the previous nine days, TCGA92/S107 (3 on a first in/first out basis if they are made at different times in the ten day period, TCGA92/S107 (4)(b).

No indexation allowance is due on acquisitions and disposals identified under the ten day rule if the acquisition and disposal are in different months, TCGA92/S107 (6).

If there is a surplus of shares acquired after the matching process these either create or are added to a Section 104 holding. This is treated as an operative event in the month the shares were acquired not the month of disposal if the ten days straddle two months.

»Ê¹ÚÌåÓýapp ten day rule does not apply to shares acquired as a result of a share reorganisation such as a rights issue. This is because the share reorganisation is not treated as involving any acquisition of the new shares.