Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable
Question:
Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable assets in the year to 31 March 2023:
(i) In February 2023, a rare Bentley motor car used by the company's Managing Director was sold for £750,000. This car had cost £300,000 in November 2006.
(ii) In October 2022, an office building was sold for £680,000. The building had been acquired in March 1987 for £170,000 and it was extended in September 1988 at a cost of £40,000.
(iii) In June 2022, a plot of land was sold for £120,000. This land had cost £42,000 in November 2004 and had been used for trade purposes.
In June 2005, the company had sold land for £50,000 and had made a claim for rollover relief in relation to this disposal. This land had cost £10,000 in October 1999 and had been used for trade purposes.
(iv) In August 2022, gilt-edged stocks bought for £100,000 in January 2008 were sold for £110,500.
(v) In June 2022, plant and machinery which was bought for £19,500 in August 2021 was sold for £22,500. In March 2023, plant and machinery bought for £16,000 in March 2017 was sold for £9,000. Capital allowances had been claimed in relation to both of these items.
(vi) In February 2023, the company sold 500 ordinary shares in Theta plc for £10 per share. Timberlake Ltd had bought ordinary shares in Theta plc as follows:
£
June 2001 Bought 2,500 shares 12,500 January 2008 Bought 3,000 shares 18,000 Timberlake Ltd had capital losses brought forward of £156,200 on 1 April 2022.
Required:
(a) Compute the chargeable gain or allowable loss arising on each of the disposals made during the year to 31 March 2023. Assume Retail Price Indices as follows:
March 1987 100.6 June 2005 192.2 September 1988 108.4 November 2006 201.1 October 1999 166.5 January 2008 209.8 June 2001 174.4 March 2017 269.3 November 2004 189.0 December 2017 278.1
(b) Compute the chargeable gains figure which should be included in the company's taxable total profits for the year to 31 March 2023.
Step by Step Answer: