CG43501 - Capital contributions to companies: made under terms of share issue

A shareholder may make a capital contribution to a company at the same time as the shareholder acquires shares in the company. If the capital contribution is made as part of the terms of issue of the shares, then the capital contribution should be accepted as consideration given wholly and exclusively for the acquisition of the shares within TCGA92/S38 (1)(a). If a capital contribution is made as part of the terms of a share issue which is treated as a reorganisation for capital gains purposes, then the capital contribution should be accepted as consideration given for the new holding for the purposes of TCGA92/S128 (1). The amount of the capital gains deduction will remain subject to the other general rules, such as TCGA92/S17 and TCGA92/S128 (2), see CG14530+ and CG51840+-