Question
During the tax year 2020-21, Mrs Jill Johnson purchased two leasehold and three freehold houses. She paid legal fees, stamp duty and other charges in
During the tax year 2020-21, Mrs Jill Johnson purchased two leasehold and three freehold houses. She paid legal fees, stamp duty and other charges in respect of the acquisitions. She then renovated them and sold them at a profit. Except as stated above, Mrs Jill Johnson did not earn any other income during the 2020-21 tax year. Mrs Jill Johnson believes that she is carrying on a trade, in which case, she ought to be subjected to personal income tax. However, her partner believes that the appropriate tax to be paid in this case is the capital gains tax.
Required: With the aid of decided cases, you are required to analyse how the HMRC will determine whether Mrs Jill Johnson will be subjected to personal income tax or capital gains tax.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started