Introduction and sale of rights nil paid
In this lesson, you'll learn how to handle the sale of rights nil paid for CGT purposes—a common scenario where shareholders sell their entitlement to a rights issue rather than taking up the shares.
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In this lesson
- 0:00 Lesson 24: CGT on shares and securities
- 0:31 Sale of rights nil paid explained
- 1:04 Rights issues and share pool basics
- 1:49 Part disposal treatment for rights
- 2:45 Small versus non-small proceeds test
- 3:28 Small proceeds: no gain, cost reduction
About this lesson
This is treated as a part disposal, and the tax treatment depends on whether the proceeds are classified as small or not small. You'll discover the key threshold (proceeds must exceed the higher of 5% of share value or £3,000 to be "not small"), and how this determines whether you apportion the cost of the original shareholding or simply deduct proceeds from the base cost. This topic builds on your Taxation knowledge of rights issues and share matching rules, and is essential for Advanced Taxation (ATX).
Duration: 4m
Transcript
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