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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Deep discount securities: conversion of securities and share exchanges

If no other consideration is received at the time of the share reorganisation the accrued income charged under the deep discount security legislation is treated as enhancement expenditure which attracts indexation from the date of the transaction.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.