Shares and securities: share identification rules
You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.
Chapter 2, CG51500+, deals with the share identification rules. One feature of shares is that unless they are numbered, and most shares are not, all shares of the same class in the same company are identical. This quality is called fungibility.
Because you cannot tell shares of the same class in the same company apart it is necessary to have a set of identification rules to determine which shares have been disposed of. These rules apply even if you can identify the shares in some other way.
They also apply to other fungible assets. In practice, the rules will mainly be relevant to intangible assets such as shares and other financial instruments and foreign currency. When physical assets are disposed of the quality or condition of a particular item will often be significant. A good example of a physical asset to which the rules may apply is bullion metal. One bar of gold or silver bullion of “good delivery” standard is in practice the same as any other.
Capital gains Technical Group can advise if it is unclear as to whether the share identification rules apply to transactions involving physical assets.