LLM8060 | Capital gains: Names: syndicate capacity: disposals: computation of gain or loss

Example of disposal of bespoke capacity

Name A pays £2,500 for £50,000 allocated capacity in syndicate X for the 2001 underwriting account. Syndicate X increases its stamp by 10% for the 2002 underwritingaccount. Name A also purchases an additional £11,000 capacity for £800 in the 2003 auctions. The following year he sells one third of his syndicate X capacity for £2,000. The computation of the capital gain before indexation will be as follows

The allowable cost of the remaining capacity is £2,200. In 2005, Name A pays £1,200 fora further £20,000 capacity in syndicate X. This is treated as enhancement expenditure. In2007, Name A sells all of the syndicate capacity for £6,000.