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HMRC internal manual

Capital Gains Manual

Shares held 6 April 1965: reorganisations of share capital: impact on rebasing to March 1982 values and the ‘kink test’

If a shareholder has made an election under TCGA92/S35(5) out of the kink-test it is irrelevant whether the shares or debentures were acquired as a result of an earlier share reorganisation. The shares and debentures are treated as though they were sold and reacquired at their 31 March 1982 value. Any later reorganisation should be dealt with in accordance with the normal rules.

If the shareholder has not made an election out of the kink-test you will need to compute the gain or loss on the old rules and compare it with the rebased gain/or loss. See CG16730+.

If you need advice on computations without rebasing (ie the ‘old rules’) you should submit your case to Specialist PT (CG Technical).