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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Stock dividends: CGT treatment

TCGA92/S141, TCGA92/S142These instructions only apply to stock dividends which are treated as income by the operation of ICTA88/S249. A shareholder who takes such a stock dividend receives not only an income receipt but also a capital asset in the form of shares. It is necessary to establish the Capital Gains Tax base cost of the shares.