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Answer to Example 3 Ashley fulfils all the conditions, therefore, the gain on the disposal of the Toon Ltd shares will qualify
for investors’ relief as the shares were subscribed for on or after 17 March 2017 and have been held
for a period of at least 3 years post 6 April 2017 in an unquoted trading company in which Ashley
has not worked.
Disposal of shares in Toon Ltd
Note 1
The AEA of £12,300 will firstly be used against the other chargeable gains of £7,000 as they would
be taxed at the higher rate of 20% leaving £5,300 to set o
ff
against the gains qualifying for investors’
relief that will be taxed at only 10%.
Answer to Example 4 As all the sale proceeds have been reinvested in a new qualifying business asset within 12 months
before to 3 years after the disposal date, the entire gain is eligible for rollover relief, as follows:
Proceeds
300,000
Less: Cost
(250,000)
Gain
50,000
Less: ROR
(50,000)
Chargeable gain
Nil
If rollover relief was not claimed note that business asset disposal relief would not be available as
this is the disposal of an individual asset used in the business, not the disposal of the business itself.
£ Sale Proceeds
375,000
Allowable cost (30,000/40,000 x £40,000) =
(30,000)
Chargeable Gain
345,000
AEA (note 1)
(5,300)
Taxable Gain
339,700
CGT @ 10% =
33,970
£ Base cost of new asset
320,000
Less: Capital gain on old asset (£300,000 - £250,000)
(50,000)
Deemed cost of new asset
270,000
261
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