Illustration - sale of rights
In this lesson, you'll learn how to calculate chargeable gains when shareholders sell rights nil paid—a common Capital Gains Tax scenario in TX and ATX.
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In this lesson
- 0:00 Rights issue and nil paid sale explained
- 1:05 Determining if proceeds are small or large
- 1:48 Part disposal computation for rights sale
- 2:47 Calculating gain on share disposal
- 3:31 Small proceeds treatment and cost reduction
- 4:54 Key checks for rights issue questions
About this lesson
You'll discover the crucial test that determines your approach: whether the sale proceeds are "small" (less than £3,000 or under 5% of the post-rights shareholding value). If proceeds are small, you simply deduct them from the original cost; if not, you must calculate a gain using a part disposal computation. Through a detailed worked example involving a rights issue, nil paid sale, and subsequent share disposal, you'll master the mechanics of apportioning cost and handling multiple disposals across different tax years—essential techniques for exam success.
Duration: 5m
Transcript
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