Help... Capital gains for individuals

PaisleyPaisley Feels At HomePosts: 93Registered
Hi all

I'm going round in circles with this question. Any help would be appreciated!


Adam purchased and sold shares in Beeco Ltd as follows:

15/04/05 Purchased 5,600 shares for £14,560
12/01/10 Sold 1,400 shares for £4,060
01/02/10 Purchased 2,800 shares for £6,160
31/03/10 Sold 7,000 shares for £20,000


Answers:

(a) The gain on the sale of shares on 12 January 2010 is £980

(b) The gain on the sale of shares on 31 March 2010 is £2,360


Thanks

Comments

  • piratepirate Trusted Regular Posts: 469Registered
    So purchase on 01/02/10 is matched with the sale on 12/01/10 ( as it 30 days after)

    So the pool will have a total of 7000 shares worth £17640

    So then he sells the shares for £20000 so as the cost is £17640 gain therefore £2360

    there wont be any Capital Gains

    are these the actual answers from the book as I wouldnt calculate a gain on A, as they were matched
  • WoooofWoooof Well-Known Posts: 174Registered
    For sales of shares:

    1) You use any shares purchased on same day of sale
    2) You use shares purchased after 30 days of sale
    3) You use the pool of shares

    So a) is:

    £6,160 / 2,800 shares = £2.20 per share

    £4,060 - (1,400 * £2.20) = £980 gain

    Hopefully you can work b out from that info

    Edit: Beaten to it :(
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    pirate wrote: »

    are these the actual answers from the book as I wouldnt calculate a gain on A, as they were matched

    Why would you not calculate a gain on A? I don't know if I've misunderstood your answer, but I agree that the first sale is matched with shares bought in the next 30 days. There is still a gain on that sale and thus it needs calculating, as per Woooofs answer.

    I don't profess to be an expert in CGT on shares, but I don't think I've missed anything. Have I?!

    (not near a calculator right now)
  • WoooofWoooof Well-Known Posts: 174Registered
    Monsoon wrote: »
    Why would you not calculate a gain on A? I don't know if I've misunderstood your answer, but I agree that the first sale is matched with shares bought in the next 30 days. There is still a gain on that sale and thus it needs calculating, as per Woooofs answer.

    I don't profess to be an expert in CGT on shares, but I don't think I've missed anything. Have I?!

    (not near a calculator right now)
    I don't understand why you wouldn't calculate a gain on A either :/ And I did my Personal Tax exam yesterday so I'm hoping I followed the correct rules!
  • PaisleyPaisley Feels At Home Posts: 93Registered
    pirate wrote: »
    are these the actual answers from the book as I wouldnt calculate a gain on A, as they were matched

    Yes these are the answers according to Osborne.
  • PaisleyPaisley Feels At Home Posts: 93Registered
    Woooof wrote: »
    For sales of shares:

    1) You use any shares purchased on same day of sale
    2) You use shares purchased after 30 days of sale
    3) You use the pool of shares

    So a) is:

    £6,160 / 2,800 shares = £2.20 per share

    £4,060 - (1,400 * £2.20) = £980 gain

    Hopefully you can work b out from that info

    Edit: Beaten to it :(

    Thanks Woooof, I just tried it again and have the same figures now!
  • piratepirate Trusted Regular Posts: 469Registered
    Jenni

    I would expect to do a gain miswrote it I think was meant to say I would expect to use the pool to work out the cost of the disposal.

    but I would agree that his proceeds on shares sold on the12.01.10 are £6160 and are matched against the shares bougt on 01/02/10 in terms of cost so they would deemed to have cost £2.20 each therefore total cost of disposed shares is £3080

    So Proceeds of sold 12/01/10 Sold £4,060
    cost of share is £3,080
    therfore Gain £980

    Does that help Paisley or have I confused you totally
  • MonsoonMonsoon Font Of All Knowledge Posts: 4,071FMAAT, AAT Licensed Accountant
    Ah that's ok, I fully agree with you now :D thanks!
  • PaisleyPaisley Feels At Home Posts: 93Registered
    pirate wrote: »
    Does that help Paisley or have I confused you totally

    It's clearer than it was earlier! Thanks pirate :)
Sign In or Register to comment.