Achiote Ltd:
– Owns 100% of the ordinary shares in Borage Ltd and 80% of the ordinary shares in Caraway Inc.
– Achiote Ltd and Borage Ltd are resident in the UK. Caraway Inc is resident in the country of Nuxabar.
– All three companies are trading companies and prepare accounts to 31 March annually.

Achiote Ltd – sale of equipment to, and proposed sale of shares in, Caraway Inc:
– Achiote Ltd acquired its 80% shareholding in Caraway Inc on 1 January 2017 for £258,000.
– Achiote Ltd is now proposing to sell an 8% shareholding in Caraway Inc to an unconnected company on 1 October 2017 for £66,000.
– An item of equipment owned by Achiote Ltd and used in its trade was sold to Caraway Inc on 1 March 2017 for its market value of £21,000.
– The item of equipment had cost Achiote Ltd £32,000 in May 2016.

Required:
(c) Advise Achiote Ltd of the chargeable gains implications arising from (1) the sale of the item of equipment to Caraway Inc; and (2) its proposed sale of the shares in Caraway Inc. (5 marks)