Joan has been a full-time director of Sunnybank Pursuits Ltd (a trading company) since 2001 and has owned 10% of the company's ordinary shares since 2002. She retired in February 2021 and gave all of her shares in the company to her daughter, Sylvia. The capital gain on the gift was £400,000 before deducting any reliefs. This was her only disposal in tax year 2020-21.

Joan does not claim business asset disposal relief in relation to this disposal but Joan and Sylvia have jointly elected that the capital gain arising should be held-over.

The market values of the company's chargeable assets at the time that the shares were gifted were:

All items of plant and machinery cost more than £6,000 each and are valued at more than £6,000 each in February 2021.

You are required to:

(i) Calculate Joan's assessable capital gain in 2020-21.
(ii) Assuming that Joan is a higher-rate taxpayer in 2020-21, calculate the CGT that would have been payable in relation to this share disposal if there had been no holdover claim but Joan had claimed business asset disposal relief instead.

Transcribed Image Text:

Land and buildings Plant and machinery Goodwill Listed shares 4,000,000 2,000,000 1,000,000 1,000,000