BTAX sample assessment Task 1.11 2013 option

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Registered Posts: 17 Regular contributor ⭐
Hi again

Just wondering if someone could help me with the workings for the BTAX assessment in the 2013 option

precious other income is 14300, Rosie is 29400 and Gavin 59700 within the question. This is after deduction of £21500 annual exemption. CG is required at 18% and 28%

Thank you

Rosie x

• Registered Posts: 645
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Rosie,

Two points are important here:
1. Read the question properly - it asks for the amount of gains that are chargeable at each rate, not the actual charge on those gains. Also, it's not stating that 21,500 is the annual exemption, it's stating that they each have a gain of 21,500 after deducting the annual exemption.
2. Remember that capital gains sit 'on top' of other income when working out which band they fall into.

So for Precious:
she has used 14,300 of the 32,010 normal rate band.
32,010 - 14,300 = 17,710 of the gain will be charged at the normal rate to bring it up to the band limit.
21,500 (total gain) - 17,710 (charged at standard rate) = 3,790 to be charged at the higher rate.

I'll let you work the other two out.