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HMRC internal manual

Capital Gains Manual

Share identification rules for corporation tax: 1982 holding: a single asset acquired in March 1982

Except in two specific circumstances a 1982 holding is regarded as a single asset and cannot grow by the acquisition of additional shares of the same class, TCGA92/S109 (2)(a). The two exceptions are

  • an issue of shares of the same class, in respect of shares already in the 1982 holding, see CG51632+,
  • the company made an election to have quoted securities held at 6 April 1965 included in the 1982 holding, see CG51633.

With the exception of any later rights issues all expenditure on a 1982 holding is treated as having been incurred in March 1982, TCGA92/S109 (2)(b). This is a significant date because of rebasing to 31 March 1982. Detailed instructions on rebasing can be found at CG16700+ but in summary the position is as follows. For disposals on or after 6 April 1988

  • if the taxpayer has made an election under TCGA92/S35 (5) out of the kink test the acquisition cost of the 1982 holding will be rebased to its value at 31 March 1982 and no other figure will be used;
  • if the taxpayer has not made an election under TCGA92/S35 (5) it will be necessary to make the kink test comparison between original cost and 31 March 1982 value. In making the kink test comparison indexation allowance is always given on whichever value is greater, the original cost or the 31 March 1982 value, see CG17406.