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HMRC internal manual

Capital Gains Manual

Stock dividends: CGT treatment: acquisition of new shares

For years from 1998-99 onwards, new TCGA92/S142, introduced by FA98/S126, provides that a stock dividend will not be treated as a share reorganisation within Section 126. As a result, the new shares are treated as a new acquisition of shares and are not added to any existing holdings under the normal reorganisation treatment in TCGA92/S127, see CG 51805+. Any disposal of the shares will be matched with acquisitions under the rules set out in CG51550+.