»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp appropriate person (IHTM34161) may choose to renounce (or give up) the bonus issue for either

• consideration, or
• gratuitously.

Renounced for consideration

You should refer any claim where the shares allotted under a bonus issue are renounced for consideration to Technical (IHTM01081).

Renounced gratuitously

Example

At the date of death Graham owned 1,000 qualifying shares, valued at £3,000.Ìý Shortly after death there was a 1 for 2 bonus issue that was renounced gratuitously in favour of Amy.Ìý Subsequently half of the original holding, 500 shares was sold within 12 months for £800.

In this case you should use the formula (IHTM34183) in IHTA84/S183 (5) to calculate the date of death value of the shares sold.Ìý »Ê¹ÚÌåÓýapp loss is the difference between that value and the gross proceeds.

Ìý

»Ê¹ÚÌåÓýapp adjusted date of death value is:

Vs(H â€� S) ÷ (Vs + Vr)Ìý

800 (3,000 � Nil) ÷ (800 + 1,600) = £1,000)

Deduct the sale proceeds of £800 from the adjusted date of death value of £1,000 to give a loss on sale of £200.