Commentary

D6.222 Bonus issue—disposal: Apportionment of base cost

Corporate tax
Corporate tax | Commentary

D6.222 Bonus issue—disposal: Apportionment of base cost

Corporate tax | Commentary

D6.222 Bonus issue—disposal: Apportionment of base cost

On the disposal of shares on which there has been a bonus issue, the acquisition cost of each of the original shares is apportioned between the old and the new holdings (because the original shares and the new holding are treated as the same asset (D6.102)).

The apportionment of the acquisition cost differs depending on whether the new holding consists:

  1.  

    (a)     entirely of shares of the same class as the original shares (see D6.223), or

  2.  

    (b)     of more than one class of share (see D6.224)

Where the bonus issue was treated as a distribution and

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