ACCA TX ^UK Syllabus C. Chargable Gains For Individuals - Gift of quoted shares - Past Papers ^{1 / 4}

On  27  August  2014,  Ruby  disposed  of  an  investment  property,  and  this  resulted  in  a  chargeable  gain  of £45,800.
In addition to the disposal already made on 27 August 2014, Ruby is going to make one further disposal during the tax year 2014–15. This disposal will be of either Ruby’s holding of £1 ordinary shares in Pola Ltd, or her holding of 50p ordinary shares in Aplo plc.

Shareholding in Aplo plc
Aplo plc is a quoted trading company, in which Ruby has a shareholding of 40,000 50p ordinary shares. Ruby received the shareholding as a gift from her father on 27 May 2010. On that date, the shares were quoted on the stock exchange at £2·12–£2·24. There were no recorded bargains on that date. The shareholding could be sold for £59,000.

Neither entrepreneurs’ relief nor holdover relief is available in respect of this disposal.

Required: 
Calculate Ruby’s revised capital gains tax liability for the tax year 2014–15 if, during March 2015, she also disposes of her shareholding in Aplo plc.

Note: The following mark allocation is provided as guidance for this requirement:
Aplo plc (3.5 marks)

You should assume that today’s date is 1 March 2013.

(a) Ginger has a holding of 10,000 £1 ordinary shares in Nutmeg Ltd, an unquoted trading company, which she had purchased on 13 February 2004 for £2·40 per share. The current market value of the shares is £6·40 per share, but Ginger intends to sell some of the holding to her daughter at £4·00 per share during March 2013.

Ginger and her daughter will elect to hold over any gain as a gift of a business asset.

For the tax year 2012–13, Ginger will not make any other disposals, and has therefore not utilised her annual exempt amount.

Required:
Explain how many £1 ordinary shares in Nutmeg Ltd Ginger can sell to her daughter for £4·00 per share during March 2013 without incurring any capital gains tax liability for the tax year 2012–13.

Note: Your answer should be supported by appropriate calculations. (4 marks)