21. Shares and securities for CGT: Individuals

Question 1

Which types of shares and securities are exempt for CGT? (3)

Answer 1

• ISAs
• Government securities
• QCBs

Question 2

What price should be used where there are multiple quotes for value of a share?

Answer 2

Mid-price

Question 3

Where shares are gifted or transferred to a connected party, at what value are they given?

Answer 3

MV at transfer

Question 4

Identification rules for shares? (3)

Answer 4

• Same day
• Following 30 days
• Share pool (at average cost)

Question 5

Diff. between bonus issue and rights issue?

Answer 5

Bonus issue: distribution of free shares

Rights issue: shares issued to shareholders at discounted price.

Question 6

In the event of a reorganisation or takeover, where consideration is share for share, what happens?

Answer 6

CGT deffered. Shares transferred at value.

Question 7

In the event of a reorganisation or takeover, where consideration is partly cash, what happens?

Answer 7

Gain arises on cash:

Cash proceeds: X
Less: Cost (W1) (X)

W1 (Cash received/cash received + new value of shares) x original cost