Commentary

D6.223 Bonus issue—disposal: apportionment of base cost where same class of shares

Corporate tax
Corporate tax | Commentary

D6.223 Bonus issue—disposal: apportionment of base cost where same class of shares

Corporate tax | Commentary

D6.223 Bonus issue—disposal: apportionment of base cost where same class of shares

Where the new holding is of shares of the same class as the original shares the acquisition cost is simply apportioned over the new holding.

These apportionment rules apply equally to shares acquired by way of a rights issue. On a rights issue, the amount paid for taking up the issue is treated as having been given for the original shares and is added to the cost of the original shares. See D6.232 for further details.

Example 1

Q purchased 5,000 ordinary shares in RST plc for £35,000 in May 20X1.

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