Personal Tax: Practice Assessment 2 Question 1:9

KAF

Hi,

Could somebody assist on the question about the house. I'm a bit confused as to why its 0. I thought the calculation would be PPR so 395,000 - 120,000 = 275000 x deemed residence / total ownership period. Any help would be appreciated.

douglasstroud

It will be nil because the house has always been his main residence apart from the last 6 months which will still qualify for relief because the last 9 months (previously 18) under these circumstances count

Pian32

The equation you've used is slightly wrong.

Capital gain * (1 - deemed residence / total ownership) is what you wanted or

Capital gain * (deemed non resident / total ownership)

Combine that with what douglas said and the deemed residence = total ownership.

Capital gain * 0 = 0