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This guidance note explains the specific rules that apply on the disposal of shares by a company. If shares of the same class in the same company have been acquired on various occasions for different amounts, it is necessary to follow the specific rules to ensure that the disposals are matched with the relevant acquisitions.

Disposals are matched with acquisitions in the following order:

1. •

   shares acquired on the same day as the disposal

2. •

   shares acquired in the previous nine days on a first in, first out basis

3. •

   shares from the section 104 pool

4. •

   shares from the 1982 holding

5. •

   shares purchased before 1965 on a last in first out basis

6. •

   shares purchased after the date of disposal in order of acquisition

TCGA 1992, ss 105, 107

The disposal of shares may fall within the scope of the substantial shareholding exemption (see the Cases in which SSE applies guidance note). Where the disposal meets the relevant criteria, the shares to be disposed of are still identified using the above matching rules.

HMRC