Personal Taxation CGT and Shares

jewels.p

I am attempting the Practice Exam 1 in the Osbourne Book and am stuck on the calculation of the Capital Gains for the Shares.

Can anyone help me with this please?

Lyn32

Unit 19

I wish I can Jewels myself working on it too!

Hi guys,

I am working on above units I was confuse on the reimbursed amount incurred for entertaining customer where do I have to put it, I know that this is disallowable expences do I have to put it in the assessable benefits?

Any ideas, can you share please!

Many thanks in advance.

lewpylew

Can you post the question and then we may be able to help. I passed PTC in December but did not use Osborne so cannot check my books.... x

Monsoon

Jewels - is it for an individual or a Ltd Co? Is it one of those matching exercises where you have to do a sum every time they do a share transaction?

Lyn, please give some context, is this employee expenses?

Mendy

Here you go, hope it's the answer you need!


Task 2.2 Summary of Gains
Gains:
Holly Cottage 106,000
Shares in Mixco plc 47,111
Necklace 500
153,611
Less loss brought forward (8,000)
Net gains 145,611
Less exempt amount (9,600)
Subject to CGT 136,011
Capital Gains Tax:
£136,011 x 18% = £24,481.98

jewels.p

Mendy wrote: »

Here you go, hope it's the answer you need!


Task 2.2 Summary of Gains
Gains:
Holly Cottage 106,000
Shares in Mixco plc 47,111
Necklace 500
153,611
Less loss brought forward (8,000)
Net gains 145,611
Less exempt amount (9,600)
Subject to CGT 136,011
Capital Gains Tax:
£136,011 x 18% = £24,481.98

I got the same as you for the Shares and the Necklace but not for Holly Cottage. I had the gain for the whole period of £106,000 but he used it as his PPR for 5years and 7 months so I calculated an exempt gain and deleted it from the Total Gains on the Cottage.

Mendy

The answer I posted was the actual one from Osbornes, so you've gone a little wrong I'm afraid! The answer to Holly Cottage is:

Task 2.1 Calculation of chargeable gains
£
Gain
Holly Cottage
Sale proceeds 156,000
Cost (40,000)
Cost of extension (10,000)
106,000

Hope this makes sense to you now!

sammyd22

I have not seen the question but passed this in December 2008.

When calculating the Assessable gain from the property make sure you dont forget to deduct your indexation allowance (Allowance for change in inflation since the purchase of the Asset):
Proceeds - 156,000
Less Cost - (40,000)
Capex (eg Extension)- (10,000)
Indexation Allowance: (xx,xxx)
______

Assessable Gain xx,xxx

x 18% xx,xxx - CGT

There doesnt seem to be any in this question according to the answer Mendy posted but a couple of people i know left this out in the exam.

A-Vic

Hi sammy isnt indexation for business tax not personal

jewels.p

Mendy wrote: »

The answer I posted was the actual one from Osbornes, so you've gone a little wrong I'm afraid! The answer to Holly Cottage is:

Task 2.1 Calculation of chargeable gains
£
Gain
Holly Cottage
Sale proceeds 156,000
Cost (40,000)
Cost of extension (10,000)
106,000

Hope this makes sense to you now!

I dont understand this then. I know you said this is the answer from Osbournes but do you know why there isnt a reduction due to him living in it? As I thought that this was the case if it was classed as your PPR.

Lou1234

Hi Jewels,

Did you find out about the answer for Holly Cottage? I was doing a search on these forums and this thread came up. I have the same answer as you and worked out that he lived in the cottage for 5 years 7 months and worked out the exempt and chargeable gain from there.

I just wondered if you found out anything more?