Income Tax Act 2007 Schedule 2 paragraph 57A

Application in relation to corresponding bonus shares

Paragraph 57A ensures that bonus shares issued in respect of existing shares in a Share Incentive Plan are treated as having been issued at the same time as the original shares they relate to.

• Where an individual holds shares ("the original shares") that were issued before a particular date, and corresponding bonus shares are issued on or after that date, the bonus shares are treated as having been issued at the same time as the original shares.
• This treatment also applies where the original shares are themselves treated as having been issued before the relevant date under this same rule — meaning the provision can apply in a chain of successive bonus share issues.
• The effect is to preserve the original issuance date for the purposes of the Share Incentive Plan rules in this Part of the Schedule, which may affect holding period requirements and tax treatment.
• The terms "bonus shares" and "corresponding bonus shares" have the same meaning as in Chapter 6 of Part 4 of the Schedule, which deals with dividend shares and reinvestment.