19.6

(a) In November 1999, Yorick bought 6,000 ordinary shares in Octagon plc for

£30,000. In March 2010, the company went into liquidation and Yorick received a first distribution of £1 per share. The market value of an ordinary share in Octagon plc just after this distribution was £2. Compute the allowable loss.

(b) In January 2003, Yolande bought 300 ordinary shares in Ellipse plc at a cost of

£1.20 per share. In May 2009, when shares in Ellipse plc had a market value of £2 each, the company made a rights issue. Yolande sold her rights, realising £25.

Compute the chargeable gain arising in November 2009 when Yolande sold all of her shares for £780, assuming that no further shares were acquired within the following 30 days.