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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Share reorganisations: consideration received: general

TCGA92/S128 (3)

Because a reorganisation is treated as involving no disposal a special rule is requiredto make sure a shareholder is taxed on any consideration they receive other than the newholding. This is given in TCGA92/S128 (3). The effect of Section 128(3) is that thereceipt of the consideration is treated as a part disposal of the original shares.However, the normal part disposal formula in TCGA92/S42 does not apply. The cost of theoriginal shares must be apportioned in accordance with the rules in TCGA92/S129, seeCG51890+.