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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Reorganisations of share capital: apportionment of cost under section 130: date of reorganisation

TCGA92/S130, subsection (3) provides that a reorganisation involving the allotment of shares is deemed to take place on the date following the day on which the right to receive the allotment expires. This fixes the day from which the three month time limit in Section 130(1) runs. This rule is needed because shareholders may take up their rights at different times giving each of them a different date at which the reorganisation occurs. Section 130(3) avoids the uncertainty this would cause.

Where a rights issue allows a shareholder to renounce an allotment before or after the date on which the first instalment becomes due the reorganisation takes place the day following the day the right expires before payment of the first instalment.

Any dispute about the date on which a reorganisation occurs should be referred to the office which deals with the company’s Corporation Tax affairs.