CRYPTO22251 - Cryptoassets for individuals: Capital Gains Tax: pooling examples: example 1 - basic section 104 pool disposal
This example provides a basic insight into how a section 104 pool operates.
Victoria bought 100 token A for 拢1,000. On 18 September 20XX Victoria bought a further 50 token A for 拢125,000. Victoria is treated as having a single section 104 pool of 150 of token A and total allowable costs of 拢126,000:
| Date | Quantity of token A | Pooled allowable costs |
|---|---|---|
| Opening balance | 100 | 拢1,000 |
| 18/09/20XX | +50 | +拢125,000 |
| Closing balance | 150 | 拢126,000 |
On 1 December 20XX Victoria sells 50 of her token A for 拢300,000. Victoria will be allowed to deduct a proportion of the pooled allowable costs when working out her gain:
| Consideration | 拢300,000 | 听 |
|---|---|---|
| Less allowable costs | 拢126,000 x (50 / 150) | (拢42,000) |
| Gain | 拢258,000 | 听 |
Victoria will have a gain of 拢258,000 and she will need to pay Capital Gains Tax on this. After the sale, Victoria will be treated as having a single section 104 pool of 100 token A and total allowable costs of 拢84,000:
| Date | Quantity of token A | Pooled allowable costs |
|---|---|---|
| Opening balance | 150 | 拢126,000 |
| 01/12/20XX | (50) | (拢42,000) |
| Closing balance | 100 | 拢84,000 |
If Victoria then sold all 100 of her remaining token A then she can deduct all 拢84,000 of the allowable costs when working out her gain/loss.