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Under the substantial shareholding main exemption, a gain accruing to the investing company on the disposal of shares, or an interest in shares in the target company is exempt if the substantial shareholding requirement (see D1.1010) and the requirements relating to the target company (see D1.1031) are both met¹.

The main exemption applies², where the investing company has held a substantial shareholding in the target company for a continuous 12-month period³ beginning not more than six years before the date of disposal⁴. For SSE purposes, a 12–month period is one which ends the day before the first anniversary of the day the period began⁵.

The target company must also have been a qualifying company throughout a continuous 12-month period for which the substantial shareholding has been held by the investing company, ending with the time of the disposal⁶.