Share matching decides which shares a company is treated as selling, and so which cost is set against the proceeds. The examiner likes it because the order is easy to get wrong when several purchases fall close to the sale date.
The rule
Match a company's disposal in this order: (1) shares bought on the same day, (2) shares bought in the previous 9 days, taking the earliest first (FIFO), (3) the Section 104 pool. Any purchase more than 9 days before the disposal joins the pool, so it is not matched separately. Calculate a gain on each matched block, using the proportion of proceeds for those shares. For pool shares, indexation allowance runs only up to December 2017.
Worked example
Dale Ltd holds a pool of 10,000 shares costing £30,000. It buys 2,000 shares for £6,000 on 5 June, 500 for £3,000 on 15 June and 300 for £1,800 on 20 June. On 20 June it sells 4,000 shares for £20,000 (£5 each). Indexation is ignored here to show the matching only.
Same day: 300 shares. Gain = £1,500 − £1,800 = (£300).
Previous 9 days: 15 June, 500 shares. Gain = £2,500 − £3,000 = (£500).
5 June is 15 days before, so it joins the pool: 12,000 shares, cost £36,000 (£3 each).
Pool: 3,200 shares. Gain = £16,000 − £9,600 = £6,400.
Total gain = £6,400 − £300 − £500 = £5,600.
Remember: only purchases on the day of sale or in the 9 days before it are matched separately, and every earlier purchase goes into the pool.
Where candidates lose marks
Matching a purchase made 10 or more days before the sale separately, instead of adding it to the pool.
Using the pool for the whole disposal when there were same-day or previous 9-day purchases, so the matching order is ignored.
Indexing pool costs beyond December 2017, or indexing a rights issue cost from the date of the original shares instead of from the rights issue date.
Try it: 4 questions
Harrowgate Seeds Ltd, a seed producer, held a Section 104 pool of 20,000 shares in Agrolex plc at 1 March 2026. During March 2026 it bought further Agrolex plc shares:
2 March 2026: 1,000 shares 10 March 2026: 1,500 shares 17 March 2026: 2,000 shares
On 25 March 2026 it sold 6,000 Agrolex plc shares.
How is the disposal of 6,000 shares matched?
Answer: A. Rule: a company's disposal is matched with shares bought on the same day, then with shares bought in the previous 9 days (FIFO), then with the Section 104 pool. Any purchase made more than 9 days before the disposal joins the pool.
The 17 March purchase is 8 days before 25 March, so it is matched first (2,000 shares). The 10 March purchase (15 days before) and the 2 March purchase (23 days before) fall outside the 9-day window. They join the pool, which becomes 22,500 shares. The remaining 4,000 shares are matched with that pool.
Why the other options are wrong: Option 2 treats the window as the previous month or 15 days, so it wrongly matches the 10 March purchase. Option 3 matches every purchase in the month on a FIFO basis, confusing the rule with a 30-day window. Option 4 matches the pool first and ignores the 9-day rule. The March purchases had already joined the pool or been matched before the sale.
Haulmark Logistics Ltd has bought shares in Carrow plc as follows:
January 2015: 10,000 shares for £20,000 June 2016: 5,000 shares for £15,000 March 2019: 5,000 shares for £20,000
In November 2025 Haulmark Logistics Ltd sold 8,000 of the shares for £40,000. It made no other transactions in Carrow plc shares.
The following indexation factors are available: January 2015 to December 2017: 0.076 June 2016 to December 2017: 0.054 March 2019 to November 2025: 0.300
What is the chargeable gain on the disposal in November 2025?
Answer: A. Rule: a company's shares of the same class go into a single Section 104 pool. Indexation allowance for companies is frozen at December 2017, so purchases are indexed only up to that month. Purchases made after December 2017 get no indexation and are added to the pool at cost. A part disposal takes a proportion of both the cost and the indexed cost.
Pool working: Jan 2015: 10,000 shares, cost £20,000, indexed cost £20,000 × 1.076 = £21,520 Jun 2016: 5,000 shares, cost £15,000, indexed cost £15,000 × 1.054 = £15,810 Mar 2019: 5,000 shares, cost £20,000, indexed cost £20,000 (no indexation after December 2017) Pool total: 20,000 shares, cost £55,000, indexed cost £57,330
Disposal of 8,000/20,000 = 40%: Cost £22,000, indexed cost £22,932 Gain = £40,000 − £22,932 = £17,068
Pool carried forward: 12,000 shares, cost £33,000, indexed cost £34,398.
Why the other options are wrong: £14,668 applies the 0.300 factor to the 2019 purchase. That adds £6,000 to the indexed pool, giving £63,330 × 40% = £25,332. Indexation cannot run beyond December 2017, so this gain is too small. £18,000 ignores indexation altogether (£40,000 − £22,000). £22,784 matches the sale on a FIFO basis against the January 2015 purchase (indexed cost £16,000 × 1.076 = £17,216) instead of using the pooled average cost.
Keel & Mast Ltd, a boat builder, bought 5,000 shares in Harbour Engines plc in May 2005 for £20,000. In October 2010 it took up a 1 for 5 rights issue at £3 per share, paying £3,000 for 1,000 shares. In November 2025 it sold part of the holding.
A trainee prepared the share pool by adding the £3,000 to the £20,000 cost. The trainee then indexed the combined £23,000 from May 2005 to December 2017.
Which statement correctly identifies the error and the correct treatment?
Answer: C. Rule: the company share pool is indexed up to the date of each event that changes its cost, such as a purchase or a rights issue. The new cost is then added, and the combined indexed figure is indexed onwards to the next event. Indexation stops at December 2017.
Correct treatment: (1) Index the £20,000 from May 2005 to October 2010. (2) Add the £3,000 rights issue cost. (3) Index the combined indexed pool from October 2010 to December 2017.
The trainee's method gives the £3,000 indexation for the period May 2005 to October 2010, before the money was spent. This overstates the indexed cost and understates the gain.
Why the other options are wrong: A confuses two rules. For matching purposes, rights shares rank with the original holding. However, their cost is indexed only from the date it was actually paid. B describes a bonus issue. A bonus issue adds shares but no cost. A rights issue is paid for, so its cost is added to the pool. D extends indexation beyond December 2017, which is not allowed. It also indexes the two costs separately instead of operating a single pool.
FitZone Clubs Ltd, which runs a chain of fitness clubs, sold 10,000 shares in Pulsar plc on 14 October 2025 for £5.00 per share. Its acquisitions of Pulsar plc shares were:
Before December 2017: a Section 104 pool of 20,000 shares with a cost of £40,000 and an indexed cost (to December 2017) of £46,000 8 October 2025: 2,000 shares for £9,600 14 October 2025: 1,500 shares for £7,650
Which TWO of the following statements are correct?
Select the two that apply (each shows on its own).
Answer: A, B. Rule: for companies, a disposal is matched first with shares bought on the same day, then with shares bought in the previous 9 days (FIFO), and only then with the Section 104 pool.
Same day, 1,500 shares: proceeds £7,500 − cost £7,650 = loss (£150) Previous 9 days (8 October, 6 days before), 2,000 shares: proceeds £10,000 − cost £9,600 = gain £400. No indexation is given after December 2017. Pool, remaining 6,500 of 20,000 shares: proceeds £32,500 − indexed cost (£46,000 × 6,500/20,000) £14,950 = gain £17,550 Total = £17,550 + £400 − £150 = £17,800
Why the other options are wrong: £27,000 matches all 10,000 shares with the pool first, as on a FIFO basis (£50,000 − £46,000 × 10,000/20,000 = £50,000 − £23,000). This ignores the same day and 9-day rules. £19,500 uses the pool's unindexed cost (£32,500 − £13,000) and leaves out the indexation built into the pool up to December 2017. The 8 October shares fall within the previous 9 days, so they are matched before the pool, not after it.
2 more TX questions on this outcome, free for life
The full ACCA TX bank, mock exams and written questions marked against the scheme. Email only, no card, no trial.
What is the share matching order for companies in ACCA TX?
Match first with shares bought on the same day, then with shares bought in the previous 9 days (earliest first), and finally with the Section 104 pool.
How many days back do company share matching rules go?
The 9 days before the disposal. A purchase made 10 or more days before the sale is added to the Section 104 pool instead.
Is indexation allowance still available for companies on shares?
Yes, but it is frozen at December 2017. The pool is indexed up to each event that changes its cost, such as a purchase or rights issue, and onwards to December 2017 at most. Purchases after that date are added at cost with no indexation.