20.6

(a) In November 2005, Yorick bought 6,000 ordinary shares in Togon pic for £30,000.

In March 2017, the company went into liquidation and Yorick received a first distribution of £1 per share. The market value of an ordinary share in Togon pic just after this distribution was £2. Compute the allowable loss.

(b) In January 2009, Yolande bought 300 ordinary shares in Lippex pic at a cost of

£1.20 per share. In May 2015, when shares in Lippex pic 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 2016 when Yolande sold all of her shares for £780, assuming that no further shares were acquired within the following 30 days.