Commentary

D1.920 Identification rules for disposals by companies of shares or securities

Corporate tax
Corporate tax | Commentary

D1.920 Identification rules for disposals by companies of shares or securities

Corporate tax | Commentary

Chargeable gains of companies—shares and securities

D1.920 Identification rules for disposals by companies of shares or securities

A transaction in shares usually relates to a specified number of shares of a particular class, not to specific shares. To calculate a capital gain or loss on a disposal it is necessary to match the shares that are sold out of the holding of shares in that class with purchases, particularly where a holding has been built up over a period or where only part of a holding has been sold.

The rules described in this article relate to disposals of securities, which are defined to include shares or securities of a company and any other assets of a nature to be dealt in without identifying the particular assets disposed of or acquired. Different rules apply to 'relevant securities' (see below). Shares are of the same class if they are so treated by the practice of a recognised stock exchange or would be so treated if they were dealt in on that exchange1.

The rules apply to a disposal by a company out of a holding of shares or securities of the same class2. The shares or securities must be held by the company in the same capacity; for example, shares disposed of by a company as beneficial owner are not matched with shares acquired by the company as trustee3.

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