The second of a two-part article focuses on shares, reliefs, and the way in which gains made by limited companies are taxed
This two-part article is relevant to candidates sitting Paper F6 (UK) in either the June or December 2013 sittings, and is based on tax legislation as it applies to the tax year 2012–13 (Finance Act 2012). Read part 1 here
Question 3 of Paper F6 (UK) focuses on chargeable gains in either a personal or a corporate context, and is worth 15 marks. A small element of chargeable gains may also be included in any of the other questions.
Personal chargeable gains (continued)
The disposal of shares can create a particular problem. This is because the shares disposed of might have been purchased at different times, and it is then difficult to identify exactly which shares have been sold. Disposals of shares are matched with purchases in the following order:
- Shares purchased on the same day as the disposal.
- Shares purchased within the following 30 days.
- Shares in share pool.
The share pool aggregates all purchases made up to the day of the disposal.
Ivy has had the following transactions in the shares of Jing plc:
1 June 2005 – Purchased 4,000 shares for £6,200.
30 April 2010 – Purchased 2,000 shares for £8,800
15 July 2012 – Purchased 500 shares for £2,500
15 July 2012 – Sold 4,500 shares for £27,000
Ivy’s chargeable gain for 2012–13 is as follows: