To qualify for the exemption, a disposal must meet all of the following criteria: • The disposing company must dispose of
shares or an interest in shares of another company. • The company must have held a "substantial shareholding" in the other company for a continuous period of at least 12 months in the preceding two years. This will be extended to the preceding six years for disposals on or after 1 April 2017. A substantial shareholding means a shareholding in respect of which the following conditions are met: • The disposing company holds at least 10% of the
ordinary share capital of the other company; • The disposing company is entitled to at least 10% of
profits available for distribution; and • The disposing company would be entitled to at least 10% of the other company's
assets on a
liquidation. • The disposing company must be a trading company or a member of a trading group. This requirement does not apply for disposals on or after 1 April 2017 • The target company (or the company whose shares are being disposed of) must be a trading company or the holding company of a trading group. The last two conditions must be met: • throughout the period: • beginning at the same time as the 12-month period referred to in the first condition begins, and • ending at the time of the disposal; and • immediately after the disposal. == Applicability ==