Capital Gain on Share Disposal with Held Over Gains

Capital Gain on Share Disposal with Held Over...

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I am trying to understand the correct treatment for CGT on disposal of shares following a held over gain.

For example...
Person already has a holding of 1000 shares, unlisted trading Co, s104 holding cost of £10 per share, no held over gains.
Person then receives gift of further 1000 shares in same Co and claims gift holdover relief, base cost £5, market value £15.

So I understand there is a held over gain of £10,000 which would, for example, be liable in the event person emigrated within 6 years.

However, how is CG on disposals calculated?
Are all shares still treated as a s104 holding which would now have an average base cost of £7.50?
So disposal of 1000 shares at £15 would have a gain of £7,500?
And does the disposal of 1000 remove the held over liability?

... or something else? Basically when does the held over liability get removed?

Thankyou.

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By BMJS
28th Nov 2015 12:25

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Yes, the shares would be pooled, so the base cost for each share would be £7.50.

Assuming the disposal wasn’t on the same day as the gift and no further shares were acquired in the 30 days after the day of disposal, then your calculation is correct.

Half of the held-over gain would be eliminated by the disposal of 1,000 shares. All 2,000 shares would need to be disposed of to eliminate the entire held-over gain.

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