PTC - Shares/Bonus issues/Disposals

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I'm having difficulties with disposing of shares where there has been Bonus issues and right issues. <BR><BR>I've look in my book (BPP) and it doesn't give an example of this but there is a question with an answer, but i really wanna know why we do it in just a strange way. The answer is nopt explained very well.<BR><BR>It looks that the Bonus issues or rights (whatever!!) are calculated differently on disposal. How can this be? It looks like it actually changes the amount of share that are owned, if you were to add then all back up again.<BR><BR>Hope that makes sense, but i really need someone to help. What happens if it come up on tomorrows paper. Stressing out now cos there is so much i need to go over and so little time! <BR><BR>HELP!!!

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    PTC - Shares/Bonus issues/Disposals

    I have got the osbourne book and it says:<BR>Bonus shares are treated as if they were acquired at the same time as the original shares that generated the issue. If Bonus shares are acquired before april 1998 they are added to the pool. Since no payment is made there is no adjustment to cost or indexed cost figures and the bonus share transation date is not relevent for indexation purposes.<BR><BR>Rights issues if bought before april 1998 will join the pool and be treated like any other share purchase. Their cost will be added into the pool and the date they were bought will be treated as the date to index to and from as usual.<BR><BR>I hope this helps!!??
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PTC - Shares/Bonus issues/Disposals

    Bonus and rights issues are two different things.<BR>Bonus issues, if added to the FA85 pool are not indexed as no money changes hands, just adds to the number of shares.<BR>Rights issues, if they are added to the FA85 Pool, then the pool is indexed before the shares are added.<BR>For taper relief the ownership of the shares begins not when the rights shares are issued, but when the original shares were issued. I really hope that this all makes sense for you!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    PTC - Shares/Bonus issues/Disposals

    Are the shares going to be a major part or are benifits more important. I hope I pass this exam as I think i did well in BTC but messed up DFS are you all same

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