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CELE SQE1 模拟练习

Examination Timing: 00H00M01S

A sole trader has decided to sell her business to a company in exchange for a debenture of £10,000 and shares worth £40,000. The business has current assets of £5,000, most of which is held in cash.

Which of the following statements best reflects the liability of the sole trader to pay capital gains tax?

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The sole trader will pay capital gains tax on at least a proportion of the value of the debenture. The sale of the assets, business, and goodwill of a business in exchange for shares in a company is a chargeable disposal for the purposes of the Taxation of Chargeable Gains Act 1992, and the seller will be liable for any gain that is received. It may be possible for the gain to be "rolled over" into the shares received by the transferor where, pursuant to s.162 of the 1992 Act, a person not being a company transfers to a company a business as a going concern, together with the assets of the business in exchange for shares issued by the company to the person transferring the business. If the transferor is paid partly in cash and partly in shares, s.162(4) of the 1992 Act provides that the amount of the gain which can be rolled over will be determined by the fraction A/B where A is the cost of the new assets (being the value of the shares issued to the transferor) and B is the whole of the consideration received in exchange for the business. 

Key Point: Under the Taxation of Chargeable Gains Act 1992, capital gains tax may be partially rolled over when a business is sold in exchange for shares, depending on the proportion of the consideration received in shares versus cash.



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