Bonus issues are free distributions of shares (e.g. two new shares for each share already held), treated as a reorganisation (see ¶15750).


In 2000, Richard purchased 300 ordinary shares in S Ltd at £3 per share, total cost £900 (ignoring expenses for the purposes of the example). In 2006, Richard received a bonus issue of 300 shares.

He then held 600 shares at £1.50 per share. They are all treated as purchased in 2000.

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