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If a UK individual sells some shares back to a company and

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If a UK individual sells some shares back to a company and the company agrees to pay for its purchase 'when it has sufficient liquidity to do so', does the UK taxpayer record the gain on the date of sale or when the sale settles i.e. when the UK taxpayer receives the funds for the sale?
Submitted: 6 months ago.
Category: Tax
Expert:  bigduckontax replied 6 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

On the date of sale, that is the disposal date for Capital Gains Tax (CGT) purposes.

I do hope that you have found my reply of assistance..

Customer: replied 6 months ago.
If a UK individual sells some shares back to a company and the company agrees to pay for its purchase 'when it has sufficient liquidity to do so', does the UK taxpayer record the gain on the date of sale or when the sale settles i.e. when the UK taxpayer receives the funds for the sale?
Expert:  bigduckontax replied 6 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

On the date of sale, that is the disposal date for Capital Gains Tax (CGT) purposes.

I do hope that you have found my reply of assistance..

Customer: replied 6 months ago.
the UK taxpayer could be on a position of having to pay CGT in one tax year even though they may not receive the proceeds from the sale until the next or even second tax year after the sale?
Expert:  bigduckontax replied 6 months ago.

Possibly; if you cast your mind back to the old Stock Exchange share trading system when settlement was made a couple of weeks later the sale still crystalised for CGT purposes on the selling date. The following rule applies: TCGA 1992, s 48 provides that, where the amount of the future consideration is ascertainable, as it is in this case, the full consideration is subject to tax.

I am so sorry to have to rain on your parade.

bigduckontax, Accountant
Category: Tax
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Expert:  bigduckontax replied 6 months ago.

Thank you for your support.

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