Roll-over relief on transfer of shares to Share Incentive Plan: allowing full relief
If the replacement asset is acquired for the full amount of the disposal consideration,then:
- you reduce the consideration for the disposal to a figure that gives a no gain/no loss result
- you reduce the acquisition cost of the replacement asset by the same amount.
The whole of the capital gain is rolled over into the acquisition cost of thereplacement asset.
Mr A acquired shares in AA Ltd for £5,000 before April 1998.
In July 2001, he sells them to the trustees of the AA Ltd approved Share Incentive Planfor their market value £15,000 making a gain after indexation allowance of £9,000. InAugust 2001, he acquires shares in XYZ Ltd for £17,500 and claims relief underTCGA92/SCH7C.
The computations are:
|(a)||No gain/no loss on disposal on AA Ltd shares|
|No gain/no loss consideration||6,000|
|(b)||Reduced costs of XYZ Ltd shares:|
|Cost to carry forward||8,500|