Non-resident companies: disposal of interest/shares by UK resident
This example illustrates the deduction under TCGA92/S13(7) if the taxpayer sells shares in a non-resident company whose gains have been apportioned under TCGA92/S13.
- June 2008 a taxpayer buys £500 out of the £750 issued shares in X Ltd, a non- resident close company, at a cost of £100,000.
- March 2009 X Ltd realises a gain of £6,000. 500/750 x £6,000 = £4,000 is apportioned to the taxpayer. The amount is included in the 2008-09 Capital Gains Tax assessment. The taxpayer is liable at 18 per cent and tax of £720 is due.
- August 2010 the taxpayer sells the shares for £130,000.
|less||Section 13(7) deduction||720||100,720|
|less||Annual exempt amount (say)||10,200|
NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. For indexation allowance see CG17207+ and for taper relief see CG17895+.