Business tax practice assessment 2 task 10

burz_valentin
burz_valentin Registered Posts: 2
ln the 2020/21 tax year Samit was a higher rate tax payer. His only capital gain in the year was from the sale of his share in a trading partnership, which he has owned lor many years. He realised a capital gain Of £500,000.
ln the 2015/16 tax year, Samit had sold a 15% interest in a listed company realising a gain of £12,000,000, He had not been a director or an employee of the company.

(a) Complete the following sentence. (2 marks)
Samit's capital gains tax payable lor the 2020/21 lax year is: Answer is£ 48,770



ln 2019, James made the following purchases oi trading properties:
- 12 July 2019, a retail unit lor £250,000
- 1 August 2019, a factory lor £325,000.
On 31 July 2020, James sold a warehouse unit lor £350,000, realising a gain of £75,000.
b) Complete the following sentence. (2 marks)
James‘s rollover relief claim for the 2020/21 lax year ls: Answer is 50,000


How do get to them answer.
Kind regards and thanks
Valentin

Answers

  • PeterC
    PeterC Registered, Tutor Posts: 236
    a) Gain = £500,000
    Deduct annual exemption £12,300
    500,000 - 12,300 = £487,700
    Tax @ 10% = £48,770

    b) Sell for £350,000
    Buy for £325,000
    £25,000 not reinvested, so no relief on this
    Gain = £75,000
    Pay tax on £25,000 not reinvested, Rollover 75,000-25,000 = £50,000
  • thedanielleleo
    thedanielleleo Registered Posts: 4
    Why is the percentage 10%? Does it qualify for relief?
  • EvilCalculator
    EvilCalculator Registered Posts: 6
    The percentage is 10% as Samit qualifies for Investors relief which gives a CGT rate of 10% for gains up to £10 million over his lifetime.
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