Corporation Tax Act 2010 section 241

Attribution: bonus shares

Section 241 deals with how amounts previously attributed to original shares in a qualifying investment are redistributed when corresponding bonus shares are issued to the investor.

• When an investor receives bonus shares of the same class and rights as their original shares, and has held those original shares continuously as sole beneficial owner since issue, the attribution rules in this section apply.
• Any amount attributed to the original shares for an accounting period immediately before the bonus shares are issued is spread proportionately across the combined holding of original and bonus shares for that period.
• Once the bonus shares are issued, the legislation treats them as if they had been part of the original investment from the outset, and as if the investor had held them continuously as sole beneficial owner since the original shares were issued.
• "Corresponding bonus shares" must be in the same company, of the same class, and carry the same rights as the original shares to which they relate.