188体育

The valuation you need is of the entire 1982 holding and not merely the shares sold.

Example

• In 1968 Stilton Holdings Ltd subscribed 拢10,000 for 10,000 拢1 ordinary shares in Mowbray Metals Ltd.
• In 1979 it subscribed for a further 8,000 拢1 ordinary shares in Mowbray Metals Ltd at a cost of 拢4.00 per share.
• In October 2012 it sold 6,000 shares for 拢90,000.
• The taxpayer has not made an election under TCGA92/S35(5).

Stilton Holdings therefore had a 1982 holding of 18,000 拢1 ordinary shares costing 拢10,000 + 拢32,000 = 拢42,000.

The valuation required from SAV is of 18,000 拢1 ordinary shares in Mowbray Metals Ltd as at 31 March 1982. Assume SAV agree a value of 拢5.00 per share for a shareholding of that size.

In the absence of an election under TCGA92/S35(5) it is necessary to make the kink test comparison between the capital gain computed by reference to the 31 March 1982 value and the original cost. That would not be needed for capital gains tax purposes for a disposal on or after 6 April 2008, nor would indexation allowance apply.

Capital Gain - 31 March 1982 value

-	-	-	拢
Disposal proceeds	-	-	90,000
less Cost	拢90,000 x	6,000	30,000
-	-	18,000	-
Unindexed gain	-	-	20,000
less Indexation	拢30,000 x 2.092	-	62,760
LOSS	-	-	(2,760)

Capital Gain - Original Cost

-	-	-	拢
Disposal proceeds	-	-	90,000
less Cost	拢42,000 x	6,000	14,000
-	-	18,000	-
Unindexed gain	-	-	36,000
less Indexation	拢30,000 x 2.092	-	62,760
GAIN	-	-	13,240

Therefore this transaction is treated as no gain/no loss by virtue of TCGA92/S35 (4).

*Indexation allowance is given on the 31 March 1982 value or original cost whichever is higher.