D6.220 Bonus issue—definition and effect of acquisition

Generally, a bonus issue falls within the share reorganisation rules (D6.101–D6.103) and should therefore be tax neutral for the shareholders.

Definition of a bonus issue

A bonus issue (or scrip issue) involves:

• new shares being issued for no payment to all existing shareholders (or to holders of specific classes of share) pro rata to their current shareholdings in the issuing company, and

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D6.220 Bonus issue—definition and effect of acquisition

Corporate tax