CG77640 - Gains: disposal of found objects: not treasure: example
A has owned land since 1974. On 1 June 2009 he entered into an agreement with B, similar to the one at CG77603, under which B agreed to search his land for objects in exchange for 50% of anything found. (This is not, of course, the only form of agreement that A and B might enter into. Other contracts may have different tax consequences.) In August 2009 B found a Saxon cross a foot below the surface.
In December 2009 the Coroners Court determined that the cross was not treasure and so it was sold at auction by A and B in July 2010 for £200,000. A and B shared the proceeds equally.
The value of the cross at 31 March 1982 is agreed at £20,000. The value of a half share at 1 June 2009 is agreed at £90,000.
The gains accruing to A are as follows: -
- Disposal of a half share at 1 June 2009
Disposal Proceeds £90,000
Less Cost 20,000 x 90,000 £10,000
90,000+90,000
CHARGEABLE GAIN £80,000
- Disposal of a half share July 2010
| £ | ||
|---|---|---|
| Disposal Proceeds | 100,000 | |
| LESS | Cost | 10,000 |
| CHARGEABLE GAIN | 90,000 |
The gain accruing to B is
| £ | ||
|---|---|---|
| Disposal Proceeds July 2010 | 100,000 | |
| LESS | Cost (June 2009) | 90,000 |
| CHARGEABLE GAIN | 10,000 |