Personal Taxation CGT and Shares

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jewels.p
jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
in AAT Level 4 (Level 8 in Scotland)
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?

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  • Lyn32
    Lyn32 Registered Posts: 85 Regular contributor ⭐
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    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
    lewpylew Registered Posts: 216 Dedicated contributor 🦉
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    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
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    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
    Mendy Registered Posts: 15 New contributor 🐸
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    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
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    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
    Mendy Registered Posts: 15 New contributor 🐸
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    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
    sammyd22 Registered Posts: 207 Dedicated contributor 🦉
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    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
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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    Hi sammy isnt indexation for business tax not personal
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    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
    Lou1234 Registered Posts: 210 Dedicated contributor 🦉
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    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?

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