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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Disposals by trustees: shares held by trustees: beneficiary entitled


If one or more beneficiaries are entitled to the stock dividend, see CG33815, and are therefore assessable under ITTOIA05/S410(2), then, under TCGA92/S142:

  • Notwithstanding TCGA92/S126 (2), see CG51700+, the case is not to constitute a reorganisation of the company’s share capital for the purposes of that paragraph, so that the trustees’ Capital Gains Tax `cost’ of the original shares is unaltered.
  • The person (or each of the persons) who is or would be entitled to the stock dividend is to be treated as having acquired that share capital for a consideration equal to `cash equivalent of the share capital’, see CTM17010.
  • There is no disposal, deemed or actual, by the trustees of the stock dividend.

Although TCGA92/S142 was substantially amended by Finance Act 1998, this did not affect the treatment described above.