CG50500 - Share identification rules: introduction

One feature of shares is that unless they are numbered, and most shares are not, all shares of the same class in the same company are identical. The problem this causes can be illustrated quite easily. In 2000 Mr A buys 1,000 shares in B PLC at a price of £2.50 per share. He buys a further 500 shares in 2005 at £3 per share. He has now spent £4,000 on 1,500 shares. In 2008 he sells 250 shares for £4 each. To work out the capital gain you need to know which shares the taxpayer sold and how much they cost.