ExpertACCA · Question 19 · Chargeable Gains for Individuals
Section B: Case 1 - Vanguard Robotics
Scenario: Vanguard Robotics was run as a sole trade by Liam, developing specialized robotic arms for manufacturing. Liam prepared accounts to 31 December each year. On 30 September 2023, Liam ceased trading as a sole trader and transferred the entire business as a going concern to a newly formed company, Vanguard Robotics Ltd, in exchange for shares.
Question: If Liam chose to disapply Incorporation Relief (s.162) and instead jointly elected for Gift Relief (s.165) on the transfer of a specific factory building to the company, what would be the immediate CGT consequence for Liam regarding the cash consideration received?
Section B: Case 1 - Vanguard Robotics
Scenario: Vanguard Robotics was run as a sole trade by Liam, developing specialized robotic arms for manufacturing. Liam prepared accounts to 31 December each year. On 30 September 2023, Liam ceased trading as a sole trader and transferred the entire business as a going concern to a newly formed company, Vanguard Robotics Ltd, in exchange for shares.
Question: If Liam chose to disapply Incorporation Relief (s.162) and instead jointly elected for Gift Relief (s.165) on the transfer of a specific factory building to the company, what would be the immediate CGT consequence for Liam regarding the cash consideration received?
Answer options:
The cash received would be completely ignored for Gift Relief purposes.
The cash received would restrict the amount of Gift Relief available, creating an immediately chargeable gain.
Gift Relief cannot be claimed on a transfer to a company.
The cash received would be taxed as a dividend.
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