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HMRC internal manual

Capital Gains Manual

Share identification rules: 1982 holding: quoted securities held at 6/4/65

Shares held at 6 April 1965 are treated as separate assets and will have to be identified separately. However, a simplification is available in respect of quoted shares and securities. A company can make an election to have quoted shares and securities brought into a 1982 holding. If the company does not already have a 1982 holding of shares or securities of the same class in the same company, the effect of the election will be to create a 1982 holding. The shares or securities go into the 1982 holding at their market value at 6 April 1965. No further account is taken of their original cost.

What is in effect the same election can be made under two provisions of the TCGA1992, TCGA92/S109 (4) and TCGA92/SCH2/PARA4.


A company can still make an election under TCGA92/SCH2/PARA4 if it has not made any other disposals of the shares held at 6 April 1965 since 19 March 1968. The election must be made within two years of the end of the accounting period in which the disposal was made or within such further time as the Board may allow.

TCGA92/S109 (4)

The company will be able to make the election under TCGA92/S109 (4) if it did make a disposal after 19 March 1968 but decided not to make an election under what is now TCGA92/SCH2/PARA4. Section 109(4) gives them a second opportunity to make such an election for disposals made after31 March 1985 to be made within two years of the end of the accounting period in which the disposal is made. Subject to the Board’s power to extend the limit.

The effect of the elections is identical and is explained at CG51642.

TCGA02/S109 now applies only for corporation tax purposes and TCGA92/SCH2/PARA4 is only of practical relevance to companies because for capital gains tax both shares held at 6 April 1965 and any forming a 1982 holding will have been converted into a section 104 holding on 6 April 2008 at their market value at 31 March 1982, see CG51570.