PTC - Shares

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Registered Posts: 3 New contributor 🐸
Hi everyone,

I think I've cracked PTC revising apart from 1 thing!

With regard to Shares, there is a rule about shares purchased and sold in the last 30 days, these have to be matched???

Can some explain how this works?

The question I am trying to do is:-

Sophia sold 4,000 shares in Prata Limited for 36K on 23/02/09. She has acquired:
14/04/95 - purchase 6k £18,400
29//05/00 - rights issue 1 for 20 - £4 each
10/03/09- Purchase - 500 - £3400

• Registered Posts: 373 Dedicated contributor 🦉
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Any shares bought on the same day as disposal, or 30 days after, are matched to the disposal. So in your example, the 4,000 sold would firstly be matched against the 500 purchased on 10/3/09, with the balance being matched against the pool.
• Registered Posts: 111 Dedicated contributor 🦉
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How the disposal then be calculated?

Will you calculate the disposal only on 3500 shares against the pool?
• Registered Posts: 45 Regular contributor ⭐
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The shares are matched, in the following order (until all shares are matched).

1) Shares bought on the same day
2) Shares bought within 30 days of sale
3) From the "Share Pool"

For the purposes of matching Rights Issues and Bonus Issues are treated as being acquire on the same date as the original shares.

In this instance, you would match the 500 against the 500 of the shares sold, removing the 500 (at their purchase price) from the pool. The remaining 3500 would be taken from the pool. The two costs would be added to give you your share cost to deduct from the proceeds.

So,

Purchase 6000 18400
Rights Issue 300 1200
(Other purchase matched)
Total 6300 19600

Proceeds = 36000
Cost (500) (matched) = (3400)
Cost (3500) (3500/6300x19600) = (10888)
Chargeable Gain = 21712
• Registered Posts: 111 Dedicated contributor 🦉
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I think I got it! Thank you
• Registered Posts: 3 New contributor 🐸
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Thanks for me as well, have now got it right in my mind ;-)