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SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: Does the sale of the barn qualify for Business Asset Disposal Relief (BADR)?
ACCA · Question 24 · Chargeable gains for individuals
SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: Can Arthur and his daughter jointly elect for Gift Hold-Over Relief on the transfer of the unquoted shares?
SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: Can Arthur and his daughter jointly elect for Gift Hold-Over Relief on the transfer of the unquoted shares?
Answer options:
No, because gifts to family members are always chargeable to CGT
Yes, because unquoted shares in a trading company qualify as business assets
No, because Arthur did not own 100% of the company
Yes, but only if the daughter pays Arthur for the shares
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