Disposal of a Chattel

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jewels.p
jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
in AAT Level 4 (Level 8 in Scotland)
A Boardroom table was sold for £26,724. It cost £17,100. The indexation factor is 0.171

In the answer it says:

Proceeds - £26,724
Less Cost (17,100)
Unindexed Gain = £9,624
Less Indexation (2924)
Chargeable Gain = £6,700

I thought it was then restricted to 5/3 (£6,700-£6,000) as it is sold for over £6,000 but it isnt. Why is this? :confused:

Comments

  • Lilyflower
    Lilyflower Registered Posts: 54 Regular contributor ⭐
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    Isn't the case that the charge is the greater of the restriction or the chargeable gain??
  • NickyW
    NickyW Registered Posts: 97 Regular contributor ⭐
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    If the proceeds are over 6K yet the cost is under 6K then the chargeable gain cannot exceed 5/3 x(Selling proceeds - 6K).
    In the case above the proceeds are over 6k and the cost is over 6k so the gain is calculated as normal.
    Please check this but am pretty sure am right!
    Regards
    Nicky
  • jewels.p
    jewels.p Registered Posts: 1,774 Beyond epic contributor 🧙‍♂️
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    Had a look in my book but it doesnt say!

    Can anyone clarify this?
  • blondeturtle
    blondeturtle Registered Posts: 13 New contributor 🐸
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    NickyW is correct (:

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