SolvedCRYPTO22251 | Cryptoassets for individuals: Capital Gains Tax: pooling examples: example 1 - basic section 104 pool disposal
From HM Revenue & Customs · Cryptoassets Manual
This example provides a basic insight into how a section 104 pool operates.
Victoria bought 100 token A for £1,000. On 18 September 20XX Victoria bought a further 50 token A for £125,000. Victoria is treated as having a single section 104 pool of 150 of token A and total allowable costs of £126,000:
| Date | Quantity of token A | Pooled allowable costs |
|---|---|---|
| Opening balance | 100 | £1,000 |
| 18/09/20XX | +50 | +£125,000 |
| Closing balance | 150 | £126,000 |
On 1 December 20XX Victoria sells 50 of her token A for £300,000. Victoria will be allowed to deduct a proportion of the pooled allowable costs when working out her gain:
| Consideration | £300,000 | |
|---|---|---|
| Less allowable costs | £126,000 x (50 / 150) | (£42,000) |
| Gain | £258,000 |
Victoria will have a gain of £258,000 and she will need to pay Capital Gains Tax on this. After the sale, Victoria will be treated as having a single section 104 pool of 100 token A and total allowable costs of £84,000:
| Date | Quantity of token A | Pooled allowable costs |
|---|---|---|
| Opening balance | 150 | £126,000 |
| 01/12/20XX | (50) | (£42,000) |
| Closing balance | 100 | £84,000 |
If Victoria then sold all 100 of her remaining token A then she can deduct all £84,000 of the allowable costs when working out her gain/loss.