A matter of substance (TT May02 p37)

After a long consultation, the Government has recently confirmed an exemption from capital gains tax (CGT) on the disposal of substantial shareholdings is to be introduced for disposals occurring on or after 1 April 2002. This means that qualifying share disposals made by companies will be exempt from tax where there is a gain, but equally capital losses will not arise on disposals which are standing at a loss. The Government’s aim is to stop tax costs hampering deals with sound commercial rationale. However, the detailed conditions mean that this will not always be achieved.