In the context of a rights issue, what amount classifies the sale proceeds as 'small' and what is the resulting treatment?

In the context of a rights issue, the characterization of the sale proceeds as 'small' is defined by specific thresholds. Option B states that an amount is classified as small if it is less than or equal to the greater of either 5% of the shares' value or £3,000, provided that there is no chargeable gain arising from the transaction.

This classification is particularly important because it facilitates tax treatment that can benefit the taxpayer. If the proceeds from the rights issue fall into this 'small' category, it typically means that the capital gains tax implications are reduced or eliminated, avoiding the complexities that come with larger transactions that may trigger chargeable gains.

In this context, the 5% of shares' value threshold allows for a more flexible limit that can accommodate varying values of shares while the fixed amount of £3,000 provides a clear benchmark. Thus, this option captures the appropriate parameters defining a small proceeds situation and outlines the tax-free outcome linked to it when no chargeable gain arises. This aligns with the tax regulations regarding rights issues, making this option the correct answer.