Rollover Relief Question?
Pjdav
Registered Posts: 27
in Business Tax
Can Someone please help me with the following question, i think i got the correct answer and the book is wrong.
On 1 Nov 16 Mike sold a factory used in his business for £600,000. The factory had cost £175,000. Mike had purchased a replacement factory for £750,000.
a) How much capital gain on the disposal of the original factory can be deferred by rollover relief claim?
for part "A" i got £425,000 which is correct.
However question "B" says if Mike's replacement factory instead cost him £500,000, the amount of the gain that would be chargeable to CGT in 2016/17 is :
The answer i got is £75,000 ( £425,000 will be used again 500,000 leaving 75,000 taxable)
but it says the correct answer is £100,000 but how ?
Thank you
On 1 Nov 16 Mike sold a factory used in his business for £600,000. The factory had cost £175,000. Mike had purchased a replacement factory for £750,000.
a) How much capital gain on the disposal of the original factory can be deferred by rollover relief claim?
for part "A" i got £425,000 which is correct.
However question "B" says if Mike's replacement factory instead cost him £500,000, the amount of the gain that would be chargeable to CGT in 2016/17 is :
The answer i got is £75,000 ( £425,000 will be used again 500,000 leaving 75,000 taxable)
but it says the correct answer is £100,000 but how ?
Thank you
0
Comments
-
Because only £500,000 of the £600,000 that the factory was sold for was reinvested then £100,000 would become chargeable to CGT immediately0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 328 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 57 AAT Level 3 Diploma in Accounting
- 95 AAT Level 4 Diploma in Professional Accounting
- 8.9K For accounting professionals
- 23 coronavirus (Covid-19)
- 273 VAT
- 92 Software
- 275 Tax
- 138 Bookkeeping
- 7.2K General accounting discussion
- 203 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 584 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership