Client had a holding comprising say 20,000 subscriber shares (£20,000 cost) and 20,000 second hand shares (say £20,000 base cost as well).
My client disposed of 10,000 shares at a loss in summer 2014. He would benefit from identifying the disposal with his subscriber shares rather than any other and using that loss against income taxed at highest income tax rates. How do the rules work where only part of his s 104 pool comprises eligible subscriber shares, and part are non-eligible second hand shares? My Peter Rayney OM company book warns there are special rules, which I imagine are those in s 148 (5) ITA 2007.
Is it bad news for my client? I think LIFO applies to s104 holdings to his disadvantage. ie his later purchase of non-qualifying shares prevents matching the disposal to subscriber shares in order to claim the full £10,000 against income in his tax return? Love to be told I've got it wrong - especially if it's in client's favour.
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Shares transferred to spouse
A client wants to transfer shares to his wife.
This will reduce his 40% liability, and also double the tax free element when the new regime starts next year. Will the Revenue object to this under settlement legislation? Or is he OK as he is not going to create "alphabet shares"