Tax on collectives special: Examining the part disposal formula

The part disposal formula is extremely important when calculating any capital gains tax (CGT) liability where only a proportion of the investment is disposed of. Let us consider a £400,000 investment where the client wishes to make a £15,000 yearly withdrawal. Using the A over A plus B formula: Purchase price x A / A+B Where "purchase price" = original investment at start A = value disposed B = value of remaining investment   The blue circle in the diagram on page two depicts the original investment and the light ring around it depicts year one growth. Think of this as a pie and, when you...