Share takeover and reorganisation (UK capital gains)
When a qualifying takeover or share reorganisation exchanges old shares solely for new shares, the new holding is generally treated as the same asset acquired at the same time and cost as the old holding. When consideration includes cash as well as shares, a chargeable part disposal can arise: allocate the original cost between cash and replacement shares by their respective values, where the ordinary part-disposal rule applies. Small-part disposal rules are excluded from TX.
Worked example
An individual exchanges shares costing £12,000 for qualifying replacement shares worth £30,000 and cash of £10,000. Assuming the ordinary part-disposal rule applies, cost allocated to the cash is £12,000 × £10,000/£40,000 = £3,000; the immediate gain is £7,000. The replacement shares retain £9,000 cost.
Common mistake
Treating every qualifying all-share exchange as an immediate disposal, or deducting the whole original cost from the cash received.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |