Alan bought shares for €10,000 with 2% acquisition costs and sold them in 2020 for €25,000, with 1% disposal costs. After using his CGT annual exemption earlier in 2020, what is the chargeable gain for CGT in 2020?

• A. €12,640
• B. €14,050
• C. €14,550
• D. €15,000

Answer: (C)

When calculating a CGT chargeable gain, you subtract the costs of acquiring and disposing of the asset from the net disposal proceeds, and then apply any available annual exemption. If the exemption has already been used earlier in the year, there’s none left to deduct.

Acquire cost: 2% of €10,000 = €200.

Disposal cost: 1% of €25,000 = €250.

Net disposal proceeds: €25,000 − €250 = €24,750.

Cost base: €10,000 + €200 = €10,200.

Gain before exemption: €24,750 − €10,200 = €14,550.

Annual exemption has been used earlier in 2020, so none remains to deduct.

Chargeable gain for CGT in 2020: €14,550.