CG55032 - Conversion of securities: small premiums

The operation of TCGA92/S133 depends upon whether the premium is greater than the allowable expenditure on the holding of securities.

• If the payment is equal to or less than the relevant allowable expenditure the payment is not treated as a disposal. The relevant allowable expenditure is reduced by the amount of the premium, TCGA92/S133 (2).
• If the payment is greater than the relevant allowable expenditure the taxpayer can elect to have the premium reduced by the amount of the relevant allowable expenditure. The relevant allowable expenditure cannot be set off against any future disposal, TCGA92/S133 (4).