BTX - Gains made on shares

mrderek88
mrderek88 Registered Posts: 44 💫 🐯 💫
in AAT Level 4 (Level 8 in Scotland)
Can someone please explain why the costs and indexed costs are what they are for the attached question.

The disposal is 8,000 and the cost is £23,388 and the indexed cost is £36,606. Where do these come from?

I'm totally stuck!!

Thanks

Derek

Comments

  • CeeJaySix
    CeeJaySix Registered Posts: 645
    The cost is the cost of the total shares held prior to disposal (50,650) over the total shares held (17,325) multiplied by the number disposed of (8,000).

    Same calculation for the indexed cost.

    The point is that you are only disposing of part of your holding, so you have to work out what the cost of the part disposed of is - essentially like AVCO for stock, but with the added complication of indexation. If you need help with calculating the indexed cost in the first place let us know.

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