Share matching rules

In this lesson

1. 0:00 Share matching rules for companies
2. 2:27 Working through a share pool example
3. 4:26 Calculating the disposal and indexation allowance

About this lesson

Unlike individuals, companies match share disposals using a three-tier hierarchy: same-day transactions, acquisitions from the previous nine days, and finally the share pool on a first-in-first-out basis. You'll see how to build and maintain a share pool with indexed cost columns, tracking both original cost and indexed cost as you move through acquisition and disposal events. The key difference from individual share matching is that companies can claim indexation allowance on share pool disposals, which increases the cost base and reduces the chargeable gain. Indexation runs from acquisition to disposal (or December 2017, whichever is earlier), and you'll learn to apply indexation factors at each transaction point to keep your pool current. Using a worked example, you'll follow Spoke Limited's disposal of Rock plc shares step by step: setting up the pool with two separate acquisitions, indexing between events, calculating the proportion of shares sold, and extracting the indexed cost to determine the indexation allowance. This technique is essential for corporation tax calculations and appears regularly in TX and ATX papers.

Duration: 6m