Business Tax Help needed!!

Flying Scarlet

Hi

I am in the middle of doing task 2.1 of paper 1 from the text book & Im stuck! Its the question which relates to the capital gain arising from disposal of shares in a ltd company. I can do the top half fine but when it comes to the last line I cant do it. This is what I have done;

No Shares Cost Indexed Cost
5280 68800 121682
Less: Sale (4000) (52121) (52121)
1280 16679 69561

However instead of 69561 the answers have 29499- where I have 52121 in the indexed cost column the answers have got 92183??

How did they work this out pls? I cannot do it!!

Richard

The indexed column is calculated by dividing 121,682/5280, then multiplying by 4,000. This will give an indexed cost of 92,183. Then subtract this from 121,682 to give a closing balance figure of 29,499.

Your gain will then be calculated as proceeds minus the cost column, minus the difference between the indexed total and the cost total (92,183 - 52,121)

Flying Scarlet

Thankyou so much- I have been looking at that for hours!!!

Cheers


FS