Chapter 17 - Shares and Securities - Matching Rules

Question 1

Share Matching Rules

Answer 1

When shares of the same class in the same company that have been bought in different stages over time are sold we use the matching rules to identify which shares are being sold.

Question 2

Rule 1

Answer 2

If an individual disposes of shares, they’re first deemed to have sold any shares they acquired on the same day

Question 3

Rule 2

Answer 3

The shareholder is deemed to have sold any shares he acquired in the following 30 days, this was introduced to stop bed and breakfasting

Question 4

Rule 3

Answer 4

The rest of the shares are pooled together into the Section 104 Pool.

Question 5

Section 104 Pool

Answer 5

Treated as a single asset for CGT. If there are multiple acquisitions in the pool, each share is treated as having a base cost of the average cost of the shares in the pool