Commentary

C3.1202 Shares issued before 19 March 1986

Capital gains tax
Capital gains tax | Commentary

C3.1202 Shares issued before 19 March 1986

Capital gains tax | Commentary

C3.1202 Shares issued before 19 March 1986

Generally under the capital gains tax rules, amounts allowed for income tax purposes are disallowed in computing a capital gain (see Division C2.2). However, this rule is specially modified for shares for which relief has been given under the BES1. If the capital gains tax acquisition costs (see C2.202) of the shares do not exceed the disposal proceeds (see Division C2.1), no adjustment is made in respect of the income tax relief given under the scheme.

Example 1

On 28 February 1986 E subscribed £10,000 for shares in F Ltd. Relief for the full amount was obtained. She later sells the shares on 28 February 1998 for £15,000. The capital gains tax calculation would be as follows—

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