Delroy and Grant
On 10 January 2020, Delroy made a gift of 25,000 £1 ordinary shares in Dub Ltd, an unquoted trading company, to his son, Grant.
The market value of the shares on that date was £240,000.
Delroy had subscribed for the 25,000 shares in Dub Ltd at par on 1 July 2006.
Delroy and Grant have elected to hold over the gain as a gift of a business asset.
Grant sold the 25,000 shares in Dub Ltd on 18 March 2020 for £240,000.
Dub Ltd has a share capital of 100,000 £1 ordinary shares. Delroy was the sales director of the company from its incorporation on 1 July 2006 until 10 January 2020.
Grant has never been an employee or a director of Dub Ltd.
For the tax year 2019-20, Delroy and Grant are both higher rate taxpayers.
They have each made other disposals of assets during the tax year 2019-20, and therefore they have both already utilised their annual exempt amount for this year.
Marlon and Alvita
On 28 March 2020, Marlon sold a residential property for £497,000, which he had owned individually.
The property had been purchased on 22 October 2001 for £152,600.
Throughout the period of ownership, the property was occupied by Marlon and his wife, Alvita, as their main residence.
One-third of the property was always used exclusively for business purposes by the couple.
Entrepreneurs’ relief is not available in respect of this disposal.
For the tax year 2019-20, Marlon is a higher rate taxpayer, but Alvita did not have any taxable income.
This will remain the case for the tax year 2020-21.
Neither of them has made any other disposals of assets during the year.