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I don’t understand why Juliet should dispose of at least 12,900 shares and postpone the disposal of at least 12,900 until next tax year.
Income tax 24,000, dispose 50,000 ordinary shares. Which Will result in a chargeable gain of 2 per shares.
Juliet Will not make any other disposal during the tax year 2019_2020 and 2020_2022.
And how the chargeable gain saving of 3810 is obtained.
Kindly elaborate, thank you
Please send me a link to the technical article in question so that I can try to assist you
Dear Tutor
The link as per below, Q44
The note above the example explains the reason for splitting a disposal between 2 tax years – wherever this is possible and the most likely example of that is a disposal of quoted shares. The note states:
“Spread a disposal over two tax years
Spreading a disposal over two tax years will mean that two annual exempt amounts are available. For a basic rate taxpayer, more of the gain will be taxed at the lower rate of CGT.”If all of the shares to be sold were sold in the same tax year a gain of 100,000 would arise that would be reduced by that years’ AEA of 12,300 to give a taxable gain of 87,700. This gain would be taxed firstly at 10% for the remaining amount of basic rate band of 13,500 (37,500 – 24,000) and all of the remaining gain would be taxed at 20%.
Therefore if a gain of 12,300 was delayed until the next year it would use that years’ AEA and no tax would be payable instead of 20% tax this year and if a further 13,500 of the gain was delayed until that next tax year it would use up the available basic rate band of 13,500 and be taxed at 10% instead of 20% this year. These are the calculations shown which give rise to the tax saving computed.
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