188体育

FACTS

The vendor acquired the asset (goodwill) in April 2003 for 拢100,000.

The vendor sells the asset at arm鈥檚 length to the purchaser on 30 April 2011.

The consideration is

• cash 拢500,000, plus
• the right to two payments of deferred consideration in cash, the amount depending on the profits of the business for the next two years.

The market value of the right to deferred consideration at the time of disposal is agreed by Shares and Assets Valuation at 拢300,000.

In September 2012 the vendor receives 拢220,000 in part satisfaction of the right to deferred consideration. The market value of the remainder of the right is agreed by Shares and Assets Valuation at 拢90,000.

In October 2013 the vendor receives 拢150,000 in full satisfaction of the remainder of the right to deferred consideration.

COMPUTATION

A: IMMEDIATE CHARGEABLE GAIN

Consideration received cash (500,000)
plus value of right (300,000) 拢800,000

Less Cost 拢100,000

CHARAGEABLE GAIN 2011-12 拢700,000

B: WHEN DEFERRED CONSIDERATION RECEIVED

September 2012

Consideration 拢220.000

Minus Apportioned cost 300,000x220,000
(220,000+90,000)

Chargeable Gain 2012-13 拢7,097

Consideration 拢150,000

Less Cost 300,000-212,903 拢87,097

CHARGEABLE GAIN 2013-14 拢62,903

There are more examples where the asset sold is shares or debentures in CG58000+