AAT Practice Assessment 1 Task 11 CGT...HELP!!
Nelson89
Registered Posts: 6
in Personal Tax
Hi.
I am currently going through the AAT PSTX practice assessment and am struggling with task 11.
Question is work out the CGT payable by each person. I have the correct answer for 3 of the 4 but the one i have no idea how the answer has been worked out is Donna.
She sold something to her brother for £19,000, market value is £22,000, cost is £7,500 her other taxable income is £30,000...
Answer = £480
Am i missing something, i have used the market value of £22,000
Cost of (£7,500)
Gain of £14,500
Less AE (£11,100)
£3,400 *10% = £340
Where am i going wrong?
I am currently going through the AAT PSTX practice assessment and am struggling with task 11.
Question is work out the CGT payable by each person. I have the correct answer for 3 of the 4 but the one i have no idea how the answer has been worked out is Donna.
She sold something to her brother for £19,000, market value is £22,000, cost is £7,500 her other taxable income is £30,000...
Answer = £480
Am i missing something, i have used the market value of £22,000
Cost of (£7,500)
Gain of £14,500
Less AE (£11,100)
£3,400 *10% = £340
Where am i going wrong?
0
Comments

MarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,433Remember she has already used 30,000 of the basic rate band so only 2,000 is available at 10% and the difference (3,400  2,000) is taxed at 20%
2,000 * 10% = £200
1,400 * 20% = £2800 
Marie, you are a star. Thank you for answering this for me. I had a feeling it had something to do with her basic rate but i couldn't convince myself that that was the way to answer it. Thank youMarieNoelle said:Remember she has already used 30,000 of the basic rate band so only 2,000 is available at 10% and the difference (3,400  2,000) is taxed at 20%
2,000 * 10% = £200
1,400 * 20% = £2801