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

Tomas bought 5,000 shares in Rowan plc for £10,000 in 2019. On 1 July 2025 Rowan plc made a 1 for 5 bonus issue. On 1 December 2025 Tomas took up a 1 for 2 rights issue at £3 per share on all his holding. On 1 March 2026 he sold 4,000 shares for £20,000. What is his chargeable gain for 2025/26 before the annual exempt amount?

The working gives a gain of £11,556, so none of the options fits.

  1. A£9,000Correct
  2. B£11,000
  3. C£10,000
  4. D£8,000

Explanation

After the bonus issue he holds 6,000 shares costing £10,000. The 1 for 2 rights issue gives 3,000 shares costing £9,000. The pool is 9,000 shares at £19,000. The cost of 4,000 shares sold is 4,000/9,000 x £19,000 = £8,444. The gain is about £11,556, which does not match the options. Option £9,000 is incorrect on this working.

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