CGT Rate

Hi,

I know I’m probably missing a simple thing here but appreciate if you can help.

I’ve put the scenario of the question below. The questions asks us to calculate Innocents CGT if she sold her shares in Cinnamon Ltd.

I got the following answer:

Proceeds – 65,000
Costs – (2,000)
Gain – 63,000 @ 20% (Because the both have taxable income of 80,000)

However, the answer in the BPP book suggests the rate should be at 10%. Why would this be?

Innocent and Nigel, a married couple, both have shareholdings in Cinnamon Ltd, an unquoted
trading company with a share capital of 100,000 £1 ordinary shares.

Innocent has been the managing director of Cinnamon Ltd since the company’s incorporation on 1 July 2008, and she currently holds 20,000 shares (with matching voting rights) in the company. These shares were subscribed for on 1 July 2008 at their par value.

Nigel has never been an employee or a director of Cinnamon Ltd, and he currently holds 3,000
shares (with matching voting rights) in the company. These shares were purchased on 23 April 2012 for £46,200.

Either Innocent or Nigel will sell 2,000 of their shares in Cinnamon Ltd during March 2021 for £65,000, but are not sure which of them should make the disposal. For the tax year 2020/21, both Innocent and Nigel have already made disposals which will fully utilise their annual exempt amounts, and they will each have taxable income of £80,000.