Chargeable gains

Test your understanding

(1). For the tax year 2015–16, Som has chargeable gains of £22,700. She has unused capital losses of £26,100 brought forward from the tax year 2014–15. What amount of unused capital losses will Som carry forward to the tax year 2016–17?

A £26,100
B Nil
C £14,500
D £3,400


(2).
For the tax year 2015–16, Alistair’s taxable income is £28,125. During the year he sold an antique vase and this resulted in a chargeable gain of £32,700. What is Alistair’s CGT liability for the tax year 2015–16?

A £5,682
B £8,790
C £6,048
D £3,888


(3).
 Dash Ltd sold a factory on 7 February 2016 for £260,000. The factory was purchased on 4 July 1997 for £114,000. Retail price indices (RPIs) are 157.5 for July 1997 and 263.0 for February 2016.

What is Dash Ltd’s chargeable gain in respect of the disposal of the factory?

A £146,000
£48,180
£69,638
D £69,620


(4).
 Jade sold 25,000 £1 ordinary shares in Silver plc on 13 March 2016. Jade had purchased 60,000 shares in Silver plc on 18 February 2007 for £72,000. On 24 May 2010, Silver plc made a 1 for 4 bonus issue.

What cost figure will be used in calculating the chargeable gain on the disposal of Jade’s 25,000 ordinary shares in Silver plc?

£6,000
£24,000
£25,000
£30,000


The following scenario relates to questions 5–9.

Jay disposed of various assets during the tax year 2015–16, and these disposals resulted in chargeable gains of £45,400 qualifying for entrepreneurs’ relief and another £122,400 of chargeable gains not qualifying for entrepreneurs’ relief. Jay’s disposals included the following:

  1. On 19 April 2015, Jay sold five acres of land for £72,000. He had originally purchased eight acres of land on 7 June 2006 for £68,000. The market value of the unsold three acres of land as at 19 April 2015 is £40,500.
  2. On 8 June 2015, Jay sold an antique table for £12,800. The table had been purchased on 2 May 2004 for £1,300.
  3. On 19 October 2015, Jay made a gift of his entire shareholding of £1 ordinary shares in AMZ plc to his son. On the date of the gift, the shares were quoted at £10.20 – £10.64.
  4. On 10 March 2016, Jay sold a factory and this disposal resulted in a chargeable gain.


Jay does not have any taxable income for the tax year 2015–16.

 

Required:

(5). What cost figure will have been used in calculating the chargeable gain on the disposal of Jay’s five acres of land?

£42,500
£68,000
£46,080
£43,520


(6). What is Jay’s chargeable gain in respect of the disposal of the antique table?

£11,333
£4,080
£11,500
£6,800


(7).
 What market value figure will have been used in calculating the chargeable gain on Jay’s gift of AMZ plc shares?

£10.20 per share
£10.31 per share
£10.42 per share
£10.64 per share


(8).
 During what period must reinvestment take place if Jay wishes to claim rollover relief in respect of the chargeable gain arising on the disposal of the factory?

10 March 2015 to 10 March 2017
10 March 2016 to 10 March 2019
10 March 2015 to 10 March 2019
10 March 2016 to 10 March 2017


(9). What is Jay’s CGT liability for the tax year 2015–16?

£32,525
£35,704
£35,633
£38,812


Answers