CG52858 - Company reconstructions: England/Wales: shares in national milk records plc

Free shares in National Milk Records plc (NMR) were distributed to producers in England and Wales on 7 April 1997. The receipt of the free shares does not give rise to any Income Tax charge. The distribution to producers of shares in NMR is not however covered by the relieving provisions in the Agriculture Act 1993, so the general capital gains rules apply. The distribution represents a part disposal of the producers' interests in the residuary England and Wales Milk Marketing Board. There is no allowable cost, so the full amount of the market value of the shares received is a chargeable gain arising on 7 April 1997. Shares and Assets Valuation have agreed that the value of each share in NMR distributed to producers on 7 April 1997 was £0.45p. If the producer subsequently disposes of the shares in NMR then, for the purpose of computing any chargeable gain or allowable loss on that disposal, the shares have a capital gains acquisition cost equal to their market value £0.45p per share at the time they were acquired.