Taxes Consolidation Act 1997 Schedule 9 paragraph 2

Determinining whether a change of ownership has taken place

Paragraph 2 of Schedule 9 sets out rules for determining whether a change of ownership has taken place, by comparing shareholdings at two points in time within a three-year period.

• Shareholdings in a company may be compared at any two points in time not more than three years apart, and a holder at the later time is treated as having acquired whatever was not held at the earlier time, regardless of any intermediate dealings.
• To allow for share issues or other reorganisations of capital, the comparison may be made in percentage terms, so that an increase in percentage holding is treated as an acquisition of that percentage.
• For the purpose of testing whether a person has acquired a holding of at least 5%, acquisitions and holdings of connected persons are aggregated and treated as those of a single person.
• Shares acquired under a will, on intestacy, or by way of an unsolicited gift (made without regard to the change of ownership provisions) are disregarded.