CG50572 - Share identification rules: CGT treatment of shares from 6.4.98: ending of pooling for CGT

FA98/CLAUSE123

Taper relief, see CG17895+, is calculated by reference to the period for which the asset has been held after 5 April 1998. It follows that there was no need to unravel any share pools which existed at 5 April 1998.

FA98/S123(1) therefore provided that for taxpayers within the charge to Capital Gains Tax shares acquired after 5 April 1998 are not to be pooled in a Section 104 holding, see CG50590+, subject to the exception below. Shares acquired after 5 April 1998 are separate acquisitions, although all shares of the same class acquired on one day are still treated as acquired in one transaction under TCGA92/S105(1), see CG50820.

The exception relates to shares first held after 5 April 1998 in a reorganisation to which Section 127 TCGA applies, see CG51700+. Common examples are shares received by way of a rights or bonus issue. Where shares are received in a reorganisation in respect of shares held in a Section 104 holding they will either be added to the Section 104 holding, if they are of the same class as the shares already held, or form a new Section 104 holding. For further guidance on share reorganisations and

• Section 104 holdings, see CG50604
• 1982 holdings, see CG50880
• shares held at 6 April 1965, see CG50973 and CG50995.

Note that most stock dividends received on or after 6 April 1998 will not be received by way of a share reorganisation. They will instead be treated as new acquisitions of shares, see CG50577.