Is this event a share disposal for CGT purposes?

[hssam]

Hi,

I have read everything out there from the HMRC on demergers (direct, indirect, exempt, you name it) but am still struggling on my specific case so guidance would be appreciated.

I hold shares in Naspers (listed in South Africa) which last year spun off some of its assets into a separate company called Prosus, which shareholders of Naspers received shares in.

I haven't sold any shares in Naspers or Prosus but the complication in my mind comes from the fact that this spinoff is deemed a CGT event in South Africa and also the Netherlands (where the company has a dual listing), as detailed in the transaction offering circular: https://www.prosus.com/NaspersPortal/media/Naspers/Pdf/press/EGM-Circular-to-Shareholders.pdf

The mechanism of the transaction is:
1. Naspers N class shareholders receive M class shares as a capitalisation issue for free
2. M class shares (zero value) are 'sold' to the company
3. The zero proceeds are used to 'acquire' shares in Prosus

So in South African and Dutch law, it seems this results in a capital gain of (Prosus share price after listing) - 0 (tax cost base of M shares that have been disposed)

I haven't seen anything in HMRC guidance about demergers that would result in tax being due when the shares haven't actually sold but to me this specific case is very unclear. Any help would be greatly appreciated. Thanks!

P.S. the more detailed prospectus is here: https://www.naspers.com/getattachment/58dd5d97-e8ff-4942-9f87-b2d6713b0ca3/AMCO-11006822-v1-Prosus_N_V__Prospectus.PDF.aspx?lang=en-US