Sam Purchased shares of Giant Ltd in Variour lots as listed below: 20/1/2005: Pu

Question

Sam Purchased shares of Giant Ltd in Variour lots as listed below:

20/1/2005: Purchased 3,700 shares for £8,400

31/10/2007: Right Shares of 1 for 5 @£1.50 per share

10/12/2010: Purchased 800 shares for £1,800

15/2/2017: Bonus Shares of 2 for 5

18/6/2017: Purchased 200 shares for £600

On 18/6/2017 he sold 4,000 shares for £24,000

Required:

Calculate the capital gains from the above disposal and also calculate the capital gain tax for the tax year 2017/18, assuming that he has not sold any other assets during the tax year 2017/18 and his taxable income is £38,700?

Explanation / Answer

Answer :

Capital Gain on Disposal (Long Term) : 17,680

Capital Gain Tax (@15%) (Long Term) : 2,650

Note for Calculation :

600

So, for Total of 7,536 shares, the amount invested is 11,910 & so for 4000 shares, the Amount invested should be 6,320 on a proportionate basis, & so difference between 24,000 & 6,320 i.e., 17,680  which is Capital Gain & so tax is also applicable on it.

Thank You,

Particulars No. of Shares Amount Purchase 3700 8400 Right Shares
(3700/5) (740*1.5) 740 1110 Purchase 800 1800 Bonus Shares
(5240/5*2) 2096 0 Purchase 200

600

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