Chargeable gains

Test your understanding

(1). For the tax year 2015–16, Som has chargeable gains of £22,700. She has unused capital losses of £26,100 brought forward from the tax year 2014–15. What amount of unused capital losses will Som carry forward to the tax year 2016–17?

A £26,100
B Nil
C £14,500
D £3,400


(2). For the tax year 2015–16, Alistair’s taxable income is £28,125. During the year he sold an antique vase and this resulted in a chargeable gain of £32,700. What is Alistair’s CGT liability for the tax year 2015–16?

A £5,682
B £8,790
C £6,048
D £3,888


(3). Dash Ltd sold a factory on 7 February 2016 for £260,000. The factory was purchased on 4 July 1997 for £114,000. Retail price indices (RPIs) are 157.5 for July 1997 and 263.0 for February 2016.

What is Dash Ltd’s chargeable gain in respect of the disposal of the factory?

A £146,000
B £48,180
C £69,638
D £69,620


(4). Jade sold 25,000 £1 ordinary shares in Silver plc on 13 March 2016. Jade had purchased 60,000 shares in Silver plc on 18 February 2007 for £72,000. On 24 May 2010, Silver plc made a 1 for 4 bonus issue.

What cost figure will be used in calculating the chargeable gain on the disposal of Jade’s 25,000 ordinary shares in Silver plc?

A £6,000
B £24,000
C £25,000
D £30,000


The following scenario relates to questions 5–9.

Jay disposed of various assets during the tax year 2015–16, and these disposals resulted in chargeable gains of £45,400 qualifying for entrepreneurs’ relief and another £122,400 of chargeable gains not qualifying for entrepreneurs’ relief. Jay’s disposals included the following:

  1. On 19 April 2015, Jay sold five acres of land for £72,000. He had originally purchased eight acres of land on 7 June 2006 for £68,000. The market value of the unsold three acres of land as at 19 April 2015 is £40,500.
  2. On 8 June 2015, Jay sold an antique table for £12,800. The table had been purchased on 2 May 2004 for £1,300.
  3. On 19 October 2015, Jay made a gift of his entire shareholding of £1 ordinary shares in AMZ plc to his son. On the date of the gift, the shares were quoted at £10.20 – £10.64.
  4. On 10 March 2016, Jay sold a factory and this disposal resulted in a chargeable gain.


Jay does not have any taxable income for the tax year 2015–16.

 

Required:

(5). What cost figure will have been used in calculating the chargeable gain on the disposal of Jay’s five acres of land?

A £42,500
B £68,000
C £46,080
D £43,520


(6). What is Jay’s chargeable gain in respect of the disposal of the antique table?

A £11,333
B £4,080
C £11,500
D £6,800


(7). What market value figure will have been used in calculating the chargeable gain on Jay’s gift of AMZ plc shares?

A £10.20 per share
B £10.31 per share
C £10.42 per share
D £10.64 per share


(8). During what period must reinvestment take place if Jay wishes to claim rollover relief in respect of the chargeable gain arising on the disposal of the factory?

A 10 March 2015 to 10 March 2017
B 10 March 2016 to 10 March 2019
C 10 March 2015 to 10 March 2019
D 10 March 2016 to 10 March 2017


(9). What is Jay’s CGT liability for the tax year 2015–16?

A £32,525
B £35,704
C £35,633
D £38,812


Answers

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