I'm wondering if anyone can clarify this for me. So I have to calculate some CGT on non-property asset. In play are section 104 pools, same day purchase and disposal and repurchase within 30 days (This isn’t trading volumes so it’s CGT applicable).
I’m struggling to understand the intention of the share matching rules in the context of the 30 day rule. I understand the 30 day rule is there to stop B&B offset of losses against gains.
So the example the HMRC give is £6000 received on a sale of 4000 shares and then 500 shares reacquired at a cost of £850 within 30 days. So applying the matching rules and matching those 500 shares the disposal proceeds for 500 of those 4000 shares is 500 / 4000 x 6000 = 750. The allowable cost is the 850, so for that 500 shares we show as loss of £100.
Here's what I am struggling is. If the original 4000 shares were bought at say £4000 and there was no reacquisition then that would be a gain for those 500 shares of £250. So applying the 30 day matching rule here actually turns a £250 gain into a £100 loss. That means the taxable gain is less than if we just ignored the rule. I don’t get it, I thought the whole point of the rule was to reduce the level of loss offset available ?
What am I missing here please ?
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch