Example 6 - Rights Issue
You can test out the following example by copying and pasting the trades into the
calculator . The trade format and instructions
can be viewed here.
|
B |
03/02/1986 |
ABC |
700 |
3.00 |
0.00 |
0.00 |
|
B |
06/02/2006 |
ABC |
800 |
4.00 |
0.00 |
0.00 |
|
Rights |
04/03/2007 |
ABC |
1500 |
2.00 |
0.00 |
0.00 |
|
S |
02/12/2007 |
ABC |
1000 |
5.00 |
0.00 |
0.00 |
|
S |
10/11/2012 |
ABC |
2000 |
6.00 |
0.00 |
0.00 |
Results
Its important to be aware a rights issue is not treated as an acquisition but as an augmentation of a current shareholding.
So the shares acquired by rights issue on 4th March 2007 are assigned pro-rata to the previous 2 buy transactions. For a worked example see this thread.
For more on how HMRC treats rights issues in association with capital gains tax see here.
