There is generally no disposal on a reorganisation, etc. However, where investors also receive additional consideration from the transaction(s) in point – whether for the surrender of rights attached to the original holding, or by way of a distribution in respect of that holding which is not taxable as income, or otherwise in respect of their original securities – there is a part-disposal of the original holding (TCGA 1992, s. 128(3)).

The intention is not entirely free from doubt but it is envisaged that the part-disposal should be dealt with first, the balance of the original base cost then being related to the new holding.

Example

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