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HMRC internal manual

Capital Gains Manual

Definitions meaning of a ‘share’

The Taxation of Chargeable Gains Act 1992 (TCGA92) uses a number of statutory definitions. This guidance looks at some of the more commonly used definitions. Other definitions will be given at the appropriate places elsewhere in the guidance.

Shares and shareholder rights

There is no statutory definition of a share. It therefore has its ordinary meaning which is a share in, a definite portion of, a company’s share capital. A company’s share capital consists of the funds subscribed to the company by its members, the shareholders. Shares represent the shareholders’ interest in or ownership of the company.

A shareholder has three principal rights, these are the rights to

  • receive dividends
  • vote at meetings of the company
  • share in the company’s assets if the company is wound-up.

Ordinary share capital

This term is defined for the purposes of the Corporation Tax Acts at section 832, ICTA 1988. There is guidance on that definition at Appendix 11,CG/APP11. The Corporation Tax Acts are in turn defined at ICTA88/S831(1) as ‘the enactments relating to the income and chargeable gains of companies and of company distributions (including provisions relating also to income tax’.