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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: gains and losses on the disposal of shares and securities

Hannah bought 1,000 shares in Brindle plc for £2,000 in 2018 and a further 1,000 shares for £4,000 in 2020. On 15 October 2025 she sold 1,500 of these shares for £9,000. She made no other transactions in Brindle plc shares. What is her chargeable gain on the sale?

The gain is £4,500. The 2,000 shares form a Section 104 pool costing £6,000, so the 1,500 shares sold carry a cost of £4,500. Deducting this from proceeds of £9,000 gives £4,500. First-in first-out or last-in first-out treatment is wrong for individuals.

  1. A£4,500Correct
  2. B£5,000
  3. C£4,000
  4. D£6,000

Explanation

The shares are in a Section 104 pool of 2,000 shares costing £6,000. The cost of 1,500 shares is 1,500/2,000 × £6,000 = £4,500, so the gain is £9,000 − £4,500 = £4,500. Using the earliest shares first would give £5,000, which is not the individual's rule.

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