Since KRA requires you to keep records, they will expect you to calculate the CGT on the two batches differently using the actual acquisition cost

Its 5%(selling price*quantity-Buying price*quantity-less transactions costs-incidental costs)


How do you determine the net gain?

The net gain is the excess of the transfer value over the adjusted cost of the
property that has been transferred. It is this excess that is subjected to tax at 5%.

The Transfer value of the property is the amount or value of consideration or
compensation for transfer of the property less incidental costs on such transfer.

The Adjusted cost is the sum of the cost of acquisition or construction of the
property; expenditure for enhancement of value and/or preservation of the
property; cost of defending title or right over property, if any; and the incidental
costs of acquiring the property.

The adjusted cost shall be reduced by any amounts that have been previously
allowed as deductions under Section 15(2) of the Income Tax Act.

If you incur a loss, the loss is carried to be offset in future against a gain of similar nature

What happens when a loss is made?

The loss may be carried forward to be offset/deducted against a gain of a similar
nature (that is, a capital gain) at a future date.

Let me try to calculate the gains for you using nominal figures

1.You bought 1,000 shares at Kshs 10 which translates to acquisition value of Kshs10,000
2.While still holding the shares,you are issued with 100 bonus shares
3.One year down the line you dispose off the 1,100 shares at Kshs 11

calculation of CGT(assumption is that transaction costs is 2.5%
First 1,000 shares
5%{(1000*11)-(1000*10)-275)}=36.25
Next 100shares
5%{(100*11)-(100*0)-27.5}=53.625

Total CGT to be paid=(36.25+53.625)=Kshs 89.875

For those who have done financial management and corporate finance,Bonus shares are NEVER and SHOULD'NT be issued in lieu of dividend, bonus shares are more of a share split than dividends-they increase the number of shares but not the share capital-If they were dividends you would'nt expect the dilution of the share price.

A company has no RIGHT to force you to take a share capital in lieu of a cash dividend;but a company is allowed to provide an option for the shareholders to take either cash dividends or stock dividends.A stock dividend will result in an increase of both share capital and number of shares!

But anyway, if you take the bonus issue as dividends, you will still end up paying the same amount of CGT as as the person who considered it as a stock split.Since it will be a capitalized gain which will be taxed at disposal!

If your broker is Suntra investment Bank... request for holding statement you see how they have attempted to address the issue. Tutaumia kweli kweli for long term guys!!!!!!!!