Deferred tax on available-for-sale equity investments

摘要

An entity holds an available-for-sale investment, ie, shares in a listed company. The tax base of the shares is £500, which was the amount initially paid for the shares. The fair value of the shares at the year end is £1,000. At the balance sheet date, the entity expects to sell the shares in five years and receive dividends of £500 during this five-year period.