PTC June 06 paper

Little p

When I tried to do question 2.1 about shares, I couldn't understand why the answer doesn't take into account the sale of shares Jan 2005 when it shows the disposal proceeds. There are disposal proceeds for the Nov 2007 2500 shares sold and then at the end for the remainding 500 jan 2005 shares but no disposal proceeds for the 500 shares sold Jan 1995. I just don't get it. Can anybody explain it in simple terms for me?

mehmet

You only need the disposal proceeds when working out the gain, so it's not relevant to the question.

They tell you of the disposal in Jan 1995 because you need to know it when calculating the number of shares and their value in the pool. When you deduct the shares from the pool, you take them out at their cost, not at the proceeds, so you wouldn't enter the proceeds there. The gain on the Jan 1995 disposal would have been calculated (and any tax due paid) when doing the tax computations for the 1994/1995 tax year.