Osborne Books (Workbook - AQ16) Practice Assessment 1 Task 11 - CGT
adilosmanadil
Registered Posts: 7
I am really struggling to understand the answer to the following question -
Taxpayer : Alison
Sold To : Friend
Proceeds : £33,000
Market Value : £25,000
Cost: £13,500
Other Taxable Income : £33,000
What is the CGT = ?
The answer is £990 but I have no idea how that figure has come about. Any assistance would be much appreciated.
Taxpayer : Alison
Sold To : Friend
Proceeds : £33,000
Market Value : £25,000
Cost: £13,500
Other Taxable Income : £33,000
What is the CGT = ?
The answer is £990 but I have no idea how that figure has come about. Any assistance would be much appreciated.
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Comments
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So you have a couple of different steps:
1st you need the amount that can be taxed:
Proceeds £33,000
Cost £13,500
Gain 19,500
Less AEA - 12,300
Chargable amount 7,200
Next you need to work out under which rate the tax will be charged. Lower =10% Higher = 20%
Lower band remaining = 37500 - 33000 = 4500 @ 10% = 450
Higher rate = (7200-4500) = 2700 @ 20 % = 540
Total tax = £990AAT Level 4, MAAT
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