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HMRC internal manual

Capital Gains Manual

Reorganisations of share capital: open offers and vendor placings: combined issues

An issue of shares may combine both a vendor placing and an open offer. For example, when a company makes an acquisition it may also want to raise funds to finance the new venture. It makes a vendor placing of the shares issued on the acquisition and a simultaneous open offer to raise new funds. When the company issues the new shares it will not distinguish between the shares issued on the vendor placing and the shares issued in response to the open offer. Therefore, if a shareholder buys new shares you will need to apportion the acquisition between the element treated as a reorganisation and the element treated as a purchase. Interactive Data publications (formerly Extel) and the prospectus issued by the company should give details of the tax treatment.