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 you
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Delroy and Grant
Grant 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
Thank you sir for replying back
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