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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Capital distributions: rights issue: no gain/no loss transfer: husband and wife or civil partners

The usual reason for transferring the rights nil paid will be so that the transferee can subscribe for the new shares. If the transferor does acquire the new shares the cost of the rights is added to the cost of the shares, see CG57866. In husband and wife or in civil partnership cases you should not object to computations prepared on the basis that the transferor’s holding is unchanged and the transferee’s acquisition cost is merely the subscription price for the shares if

  • a transfer of rights nil paid would be a small capital distribution to which TCGA92/S122 (2) applies, and
  • both spouses or civil partners are resident in the United Kingdom, and
  • the transferee subscribes for the new shares.