Question 4a
Answer

King
(a) Minimum number of shares in Wye Ltd to be sold to generate £30,000 of after-tax proceeds Each share sold will generate sale proceeds of £45 and result in a gain of £40 (£45 – £5).

King’s annual exempt amount for the tax year 2015/16 has already been used.
King is an additional rate taxpayer so will pay capital gains tax at 28% on his taxable gains.

The capital gains tax in respect of a single share is £11·20 (£40 x 28%).
The after-tax proceeds from the sale of a single share is therefore £33·80 (£45·00 – £11·20).

Therefore the number of shares to be sold to generate £30,000 in after-tax proceeds is 888 (£30,000/£33·80).

Tutorial note: Alternative calculation, if X is the number of shares to be sold:
45X – (40X x 28%) = 30,000
45X – 11·2X = 30,000
33·8X = 30,000
X = 888