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HMRC internal manual

Venture Capital Schemes Manual

Seed Enterprise Investment Scheme (SEIS): SEIS disposal relief: bonus issues

ITA07/S257E (4)

If a company makes an issue of shares to its shareholders for no payment, this is called a bonus issue, see CG50290. As long as the issue is made in respect of and in proportion to the existing shares TCGA92/S127 will apply to treat all the shares (original and bonus) as though they were the same asset acquired at the same time as the existing shares, see CG51700.

If the bonus shares are of the same class and carry the same rights as the original shares and the original shares attracted SEIS Income Tax relief, the bonus shares are treated as if they also attracted Income Tax relief. Therefore there is no need to distinguish between original and bonus shares when dealing with a disposal or part disposal. If all the shares are sold you should treat all the shares as having had Income Tax relief. If there is a part disposal you should treat the shares disposed of as having had a corresponding proportion of the Income Tax relief.