Person tax question

LeeLee Feels At HomePosts: 29Registered
Hi guys can someone please help me with how question 7.5 (b) has been worked out to get answer £5200 - in Osborne workbook page 28.
My working ;
10/(10+15)*12= £4800.

Thanks for yr help

Lee

Comments

  • readerreader Experienced Mentor Posts: 1,039MAAT, AAT Licensed Accountant
    Lee wrote: »
    Hi guys can someone please help me with how question 7.5 (b) has been worked out to get answer £5200 - in Osborne workbook page 28.
    My working ;
    10/(10+15)*12= £4800.

    Thanks for yr help

    Lee

    If you type out the question I'm more than happy to take a look at it.
  • LeeLee Feels At Home Posts: 29Registered
    reader wrote: »
    If you type out the question I'm more than happy to take a look at it.

    A quarter acre piece of land was sold for £10,000. It had been bought as part of the two-acre plot for £12000. The remaining land was valued at £15000 at the time of the sale.


    The gain on the land is:
  • readerreader Experienced Mentor Posts: 1,039MAAT, AAT Licensed Accountant
    Lee wrote: »
    A quarter acre piece of land was sold for £10,000. It had been bought as part of the two-acre plot for £12000. The remaining land was valued at £15000 at the time of the sale.


    The gain on the land is:

    Cost of land = 12,000

    Proportion of land sold = 10, 000 / (10, 000 + 15, 000) = 0.4

    Therefore proportion of cost deductible against gain = 12, 000 x 0.4 = 4, 800

    Capital gain = 10, 000 - 4,800 = 5, 200


    I've taken a look at your answer and you have only calculated cost. The question asked for gain, i.e. sale proceeds - cost.
  • LeeLee Feels At Home Posts: 29Registered
    Oops, thank you so much, you are right, just these little mistakes will cost me good marks.

    lee
Sign In or Register to comment.