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ACCA Applied Skills · Taxation (UK) · Gains and losses on the disposal of shares and securities

Omar bought 3,000 shares in Delta plc for £9,000 in 2020. On 5 May 2025 Delta plc made a 1 for 2 rights issue at £4 per share and Omar took up his rights in full. On 12 January 2026 he sold all 4,500 shares for £27,000. Assuming no other disposals, what is his chargeable gain for 2025/26 before the annual exempt amount?

The chargeable gain is £12,000. The 1 for 2 rights issue adds 1,500 shares costing £6,000, so the pool cost is £15,000. Deducting this from the proceeds of £27,000 gives the gain, because rights shares are added to the pool at the price paid.

  1. A£12,000Correct
  2. B£9,000
  3. C£18,000
  4. D£15,000

Explanation

The rights issue gives 1,500 new shares costing 1,500 x £4 = £6,000. Pool cost is £9,000 + £6,000 = £15,000. The gain is £27,000 - £15,000 = £12,000. Option £18,000 ignores the rights cost and uses only £9,000 cost.

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