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Posted Thu, 09 Nov 2023 17:05:39 GMT by BBonus
When a portion of an initial Section 104 holding is disposed of, how should CGT be calculated when disposing of the remainder? What is the average price of the remainder? The examples in HS284 are difficult to understand.
Posted Fri, 10 Nov 2023 16:01:35 GMT by HMRC Admin 10 Response
Hi
The pool of allowable cost is adjusted each time an ‘operative event’ occurs.
An operative event is anything which reduces or increases the value of the pool of cost.
Purchases and sales of shares are the most common examples of operative events.
The basic steps for working out a gain (or loss) on a disposal of shares in a Section 104 holding are as follows.
If all the shares in the holding are disposed of, the allowable expenditure is all of the pool of cost. If only some of the shares are disposed of, the allowable expenditure is a fraction of the pool of actual cost.
The fraction is ‘Number of shares sold’ divided by ‘Total number of shares in the holding’.
The remaining cost in the holding, to be identified against future disposals, is reduced accordingly. 

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