21. CGT: Shares and securities for individuals Flashcards
What types of shares and securities are exempt from capital gains tax? (3)
- Listed government securities
- Shares held in ISAs
- Qualifying corporate bonds (company debentures or loan notes)
What are the qualities needed to be classed a qualified corporate bond? (3)
- Denominated by £
- Normal commercial loan
- Acquired after 13 March 1984
What changes when shares are gifted or transferred to a connected party?
Market value of the shares is used as the proceeds/
How do you calculate the market value of a share?
Unquoted shares - given in question
Quoted shares - mid-price of the Stock Exchange Daily Official List
What are the share matching rules? (3)
Matched in the following order:
- same day as disposal
- 30 days following disposal on FIFO basis
- share pool (all shares bought prior to disposal)
How do you treat a bonus issue?
How do you treat a rights issue?
Add amount of shares to share pool at £nil cost for a BONUS ISSUE.
Add amount of shares and price paid for a RIGHTS ISSUE.
How do you treat shares when a company is taken over?
Remain at same value until sold.
What is the formula for working out gains on cash received?
Cost or original shares (total) x (cash received/total MV of all consideration)
