IFM40535 - Group issues: continuity of substantial shareholdings: when company leaves regime

Companies that have left the QAHC regime after receiving a transfer of qualifying shares from a group company

If a QAHC has received a transfer of qualifying shares from a group company and then subsequently leaves the regime before the shares have been held for twelve months, it is still possible for the SSE to apply to the gain/loss which accrued to the group at point of transfer of the shares to the QAHC.

Example

A company has held a substantial shareholding of qualifying shares for three months before transferring them to a QAHC in the same group. The qualifying shares are treated as disposed of by the group company and acquired by the QAHC at point of transfer. The company leaves the QAHC regime seven months after the shares have been transferred to it and eventually disposes of the shares after holding them for a combined period of two years (three months for the group company and one year and nine months for the QAHC).

If all the substantial shareholding requirements are met immediately after the date in which the qualifying shares have been held for a combined period twelve months (three months for the group company, and nine months for the company who was a QAHC), then the gain/loss accruing from the deemed disposal by the group company of the qualifying shares at point of transfer to the QAHC is not a chargeable gain/allowable loss.