Where an investor, together with persons connected with him, holds five per cent or more of the shares or debentures of the target company, the no disposal/no acquisition rule (see ¶560-000) only applies if the transaction:

is effected for bona fide commercial reasons; and

does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to capital gains tax or corporation tax

(TCGA 1992, s. 137(1)–(3); for connected persons, see ¶503-800).

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