Taxation of Chargeable Gains Act 1992 section 130

Composite new holdings

Section 130 deals with how to split the acquisition cost of a new holding when a share reorganisation results in the holder receiving more than one class of shares, debentures, or unit trust rights.

• The section applies where a reorganisation produces a new holding of more than one class, and at least one class was listed on a recognised stock exchange or had daily prices published within three months of the reorganisation (or a longer period if HMRC allows).
• When a gain or loss needs to be calculated on a disposal of all or part of one class within the new holding, the total acquisition cost must first be split across all the classes by reference to their market values on the first day such values were quoted or published.
• If any class carries an attached liability that forms part of the overall cost being apportioned, the market value of that class is adjusted to reflect that liability before the apportionment is made.
• The effective date of a reorganisation involving allotments of shares, debentures, or unit holders' rights is the day after the last day on which holders can renounce their allotment.