PTC -disposal of shares

hanapospis

Hi Guys,

I am trying to do the exams full paper from Osborn Books and I am having a problem with the disposal of shares. Can anyone help me out?

Apr1986......purchased 300 for 3000
May1990.....purchased 500 for 8500
June1992....Bonus issue 1for5
April1995....Purchased 1000 for 16000
March1999..Sold 400 for 7600

In november 2009 Jeanetta sold all her shares for 45000.

04/86... purchased .... 300.....3000
05/90....purchased .... 500.....8500
06/92....bonus issue...160....... -
04/97....purchased.....1000.....16000
03/99....sold..............400.......7600
________________________________
...............................1560.....19900

Proceeds......45000
Cost............19900
Gain............25100

Will I used 7600 as an amount the shares were sold for or do I calculate the amount as (27500/1960)x400 = 5612? so the gain is 23.112.

Thank you

israrbaig

Shares

Hi

I was looking at your questions and i think you 2nd answer is correct. But sadly i may be wrong as just recently i found the whole personnal tax law have changed where index and taper relief have stopped.

But from questions i have done you would use the 5612 to work out the cost as the 7600 would include profit etc.

Thanks for the work out

:laugh:

carla030698

hanapospis wrote: »

Hi Guys,

I am trying to do the exams full paper from Osborn Books and I am having a problem with the disposal of shares. Can anyone help me out?

Apr1986......purchased 300 for 3000
May1990.....purchased 500 for 8500
June1992....Bonus issue 1for5
April1995....Purchased 1000 for 16000
March1999..Sold 400 for 7600

In november 2009 Jeanetta sold all her shares for 45000.

04/86... purchased .... 300.....3000
05/90....purchased .... 500.....8500
06/92....bonus issue...160....... -
04/97....purchased.....1000.....16000
03/99....sold..............400.......7600
________________________________
...............................1560.....19900

Proceeds......45000
Cost............19900
Gain............25100

Will I used 7600 as an amount the shares were sold for or do I calculate the amount as (27500/1960)x400 = 5612? so the gain is 23.112.

Thank you

Hi, I beleive you would use your second choice, the way I find it easiest is to list all the purchases, subtotal them and then work out the disposal cost, you dont enter the actual selling price into your pool you enter the value of:

No of shares sold / No of Shares in the pool x Value of shares in pool.

in this case giving you £5612.

The gain is then calculated as:

Disposal proceeds £7600
Less: cost (£5612)
Gain £1988


Hope this helps! x