Chapter 19 - Chargeable Gains For Companies

Question 1

When a company disposes of shares it has to match it’s disposal of shares with it’s acquisitions in what order?

Answer 1

1) Acquisitions made on the same day as date of disposal.
2) Acquisitions made within previous 9 days.
3) Shares in the s.104 pool (consists of shares acquired on or after 1 April 1982).

Question 2

Are companies entitled to an annual exemption in arriving at their taxable gains?

Answer 2

NO - companies do not get an annual exemption.

Question 3

What are the elements of a share pool for companies?

Answer 3

3 columns - cost, no. of shares & indexed cost.

Question 4

Does indexation occur in the share pool for companies?

Answer 4

Yes - this is calculated for each operative event (whenever shares acquired or disposed).
But DON’t round the indexed rise to 3dp.

Question 5

Is an indexed rise calculated prior to a bonus or rights issue?

Answer 5

Depends:
Bonus issue - no - as this is not an operative event as there is no issue of new shares, just reorganisation of share capital.
Rights issue - yes - this is an operative event.

Question 6

When is the last time the pool will be indexed?

Answer 6

Pool is indexed for the last time for the period to December 2017.

Question 7

What is the substantial shareholding exemption?

Answer 7

Where if one company sells shares out of a substantial shareholding (10%+) in a TRADING company, any gain on the sale of those shares will be exempt. (Subject to meeting 12M holding requirement in last 6 years).