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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Share reorganisations: consideration received: capital distributions

TCGA92/S128(3) refers in particular to the case where the taxpayer received a capitaldistribution in respect of shares. See CG57800+ for instructions on capital distributions.In practice most of the cases you are likely to see will involve capital distributions.For example,

  • the sale of rights ` nil paid’, see CG57855+
  • receipts from the sale by the company on the shareholder’s behalf of fractional entitlements in a bonus or rights issue, see CG57856
  • the receipt of cash on a takeover if the shareholder also received shares or debentures, see CG52587. In strictness this is a case in which the reorganisation provisions are adapted to apply to a transaction involving two companies.