Personal Tax: Practice Assessment 2 Question 1:9

KAF
KAF Registered, AAT Student Posts: 22
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.



Comments

  • douglasstroud
    douglasstroud Registered Posts: 222
    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
    Pian32 MAAT Posts: 471
    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
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