Tx notes fa22 Final

June 2023 to March 2024 exams
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27. Zoe 
Apply matching rules:
 
i)
same day
X
ii)
Next 30 days
10/2/2023
200 shares
Calculate Gain:
Proceeds 200/1000 
×
20,000 =
4,000
Less: cost
(3,600)
Capital Gain
400
iii)
Share Pool:
Number
Cost
30/4/2022 Acquisition
1,500
18,000
31/5/2022 Acquisition
500
7,000
2,000
25,000
31/1/2023 Disposal
(800)
(10,000)
1,200
15,000
Calculate the Gain:
Proceeds 800/1000 
×
20,000 =
16,000
Less cost
(10,000)
Capital Gain
6,000
Summary
Next 30 days
400
Share Pool
6,000
Total Capital Gains
6,400

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28. Michael 
Apply matching rules
 
i)
Same day
X
ii)
Next 30 days
X
iii)
Share Pool
Number
Cost
January 2022
2,700
5,400
May 2022
600
1,500
June 2022 Rights issue 1:3 @ £2:30
1,100
2,530
4,400
9,430
Disposal August 2022
(4,000)
(8,573)
400
857
Calculate the Gain:
Proceeds
14,000
Less cost
(8,573)
Capital Gain
5,427

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29. Jenny 
Gains not qualifying for Business Asset Disposal Relief 
Gains qualifying for Business Asset Disposal Relief 
Total CGT:
£44,500 + £10,540 = £55,040 
Due 31 January 2024. 
Note:
1.
Jenny’s taxable income is below the basic rate band but the gains qualifying for Business 
Asset Disposal Relief e
ff
ectively use up the remaining basic rate band such that gains not 
qualifying for relief are taxed at 20%
2.
The AEA and the capital loss brought forward are used in priority against those gains taxed at 
the highest tax rate.
3.
The business has been owned for at least 2 years and the shares have been owned for more 
than 2 years and for which period Jenny has been an employee. These disposals therefore 
qualify for Business Asset Disposal Relief.
4.
The remaining gains eligible for relief in future years are (1,000,000 – 445,000) = £555,000
£
Investment commercial property
80,000
Less AEA)
(12,300)
67,700
Less Capital loss b/f (note 2)
(15,000)
52,700
CGT @ 20% (note 1)
£10,540
£
Sale of business
Goodwill
100,000
Factory
250,000
Warehouse
(50,000)
300,000
Sale of shares
145,000
445,000
CGT @ 10% (note 3)
£44,500

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30.
 
Wendy 
(a)
Wendy - Capital gain on shares sold in January 2023
Gift holdover relief is available as shares in an unquoted trading company are qualifying business 
assets. As the disposal was a sale at undervalue it is still the OMV of the shares that is used in 
computing the gain.
As the actual proceeds received exceed the actual cost of the shares:
Actual proceeds:
70,000
Less Cost
(40,000)
Actual gain
30,000
This part of the gain remains chargeable on Wendy and only the remaining part of the gain is eligible 
for gift holdover relief.
(b)
Wendy’s grandson - Base cost 
£
£
Market value of shares in January 2023
165,000
Less: cost
(40,000)
125,000
Less:
Gain deferred with gift holdover relief claim
Gain
125,000
Less: (Proceeds received - Actual cost) = (70,000 - 40,000)
(30,000)
(95,000)
Chargeable Gain (70,000 - 40,000)
30,000
£
Market value of shares, January 2023 
165,000
Less: Gain deferred
(95,000)
Base cost
70,000

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31. Amy 
Proceeds
400,000
Less cost
(190,000)
Gain
210,000
Less PRR (W1)
(105,335)
Chargeable Gain
104,665
(W1)