Bonus and rights issues of shares (UK capital gains)
A qualifying bonus issue normally adds shares without adding subscription cost to the existing holding. Where a shareholder takes up a qualifying rights issue, the amount paid for the new shares is generally added to the existing pooled cost. The statutory share-reorganisation rules, identification and any disposal of rights must be considered separately.
Worked example
An individual holds 100 shares with a pooled cost of £1,000 and receives 20 qualifying bonus shares. Assuming the reorganisation rules apply, the holding becomes 120 shares and the total pooled cost remains £1,000.
Common mistake
Adding an invented purchase cost for free bonus shares or failing to add the amount paid when taking up qualifying rights.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |