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On 10 January 2021, Delroy made a gift of 25,000 £1 ordinary shares in Dub Ltd, an unquoted trading company, to his son, Grant. The market value of the shares on that date was £240,000.
Delroy had subscribed for the 25,000 shares in Dub Ltd at par on 1 July 2006.
Delroy and Grant have elected to hold over the gain as a gift of a business asset.Grant sold the 25,000 shares in Dub Ltd on 18 March 2021 for £240,000. Dub Ltd has a share capital of 100,000 £1 ordinary shares. Delroy was the sales director of the company from its incorporation on 1 July 2006 until 10 January 2021.
Grant has never been an employee or a director of Dub Ltd.
For the tax year 2020-21, Delroy and Grant are both higher rate taxpayers.
They have each made other disposals of assets during the tax year 2020-21, and therefore they have both already utilised their annual exempt amount for this year.What is Grant’s capital gains tax (CGT) liability for the tax year 2020-21 in respect of the disposal of the shares in Dub Ltd?
hi sir,
i have a doubt in this question.
the answer given for this question is this ( 215,000 (240,000 – 25,000) at 20% = £43,000)
i am not sure if GRANT qualifies for gift relief.
and if he does how will we calculate his base cost according to the answer given ?would appreciate if you could help in this question
thank youGrant has sold the shares for the full OMV of 240,000 – there is no gift and therefore no gift relief on his sale.
Delroy did qualify for gift relief on the gift to Grant – as given in the question – thus deferring his gain of 215,000 (240,000 – 25,000) and creating a base cost of those shares to Grant of 25,000
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