Tx notes fa22 Final

Note: 
The matching rules for individuals are di
ff
erent from those that apply to companies
1.3. The share pool 
This keeps a record of the following details of all shares acquired in a company:
(a)
number of shares
(b)
cost of shares
(c)
the number of shares will include all acquisitions including bonus issue and rights issues. 
Bonus issues are where a company issues free shares on a proportionate basis to its existing 
shareholders. Rights Issues are where a company seeks to raise new share capital and o
ff
ers 
its existing shareholders the right to acquire on a proportionate basis additional shares in the 
company at an advantageous share price.
(d)
the shares disposed of from the share pool will be deemed disposed of at the average cost of 
shares held in that pool.
The share pool is easier to produce for individuals than for companies, for as no indexation 
allowance applies the only information recorded is number of shares and cost of shares.

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Example 1
 
 
Jane owns shares in ABC Ltd. She acquired 1,500 shares in the company on 31 May 2017 for 
£20,000, and 500 shares on 30 June 2018 for £10,000. On 7 July 2022 Jane bought a further 200 
shares in ABC Ltd for £4,000.
Jane sold 1,000 shares in ABC Ltd on 28 June 2022 for £25,000. She is not an employee of ABC 
Ltd.
Calculate Jane’s capital gain on the disposal of the shares on 28 June 2022. 
2. Bonus issues 
Bonus shares: An issue of free shares to existing shareholders in proportion to their existing 
shareholding.