SSE

In this lesson

1. 0:00 Substantial Shareholding Exemption Overview
2. 0:16 SE Conditions for Trading Companies
3. 0:46 Ownership Duration Requirements Explained
4. 1:06 SE Treatment for New Group Companies
5. 1:30 Capital Loss Treatment Under SE

About this lesson

Understanding when SSE applies is essential for accurate tax treatment in your Taxation papers and case studies. The key requirement is ownership: the disposing company must have held at least 10% of the shares in the target company for a continuous 12-month period within the last six years. The target company must be either a trading company or a holding company of a trading group. If the target is a newly formed company that received assets from a 75% group company, the exemption still applies as long as the group itself has been trading for 12 months or more. Crucially, SSE is automatic — no claim is required. An important consequence: if SSE applies, any capital losses on the disposal become disallowable. This is because the tax system treats gains and losses symmetrically — if a gain isn't taxed, the corresponding loss cannot be relieved. When you spot a company selling shares in another company, always check whether the 12-month ownership test is satisfied within the six-year lookback period.

Duration: 2m