II. Question 10: Capital Gains Tax this question has two parts. Parta) Nancy is a higher rate taxpayer and resident in the UK. During the tax year to 5 April 2021 Nancy made the following asset disposals. 1. On 10 May she gifted to her granddaughter a diamond ring. The ring cost Nancy 2,400 and was valued at 11,900 On 16 May she gifted her grandson her two-year old Honda Civic. The car had cost Nancy 16,985 and had a book price of 12,000 On 23 May she sold a commercial property for 330,000. Selling fees were 1,650 and legal fees were 700. She had purchased the property in March 2001 for 120,000, incurring stamp duty of 2,400, legal fees of 450 and survey costs on 320 On 22 August she sold a painting for 3,000. It had originally cost 500 v. On 8 November she sold a garden statue for 1,200. It had originally cost 9,000 but was badly weather-damaged. Required: Calculate Nancy's Capital Gains Tax liability for the year to 5 April 2021 and state when any capital gains tax liability would be payable III. IV. 10 marks Part b) Assume today's date is 1 March 2021. You are a trainee accountant and have been asked to advise a client, John Osei, on how to minimise a capital gains tax liability. John is a retired doctor, married to Ada. Both are in their eighties and both are basic rate taxpayers. In the early years of his retirement John spent time investing in the stock market and has built up a portfolio of shares. The portfolio was generally successful with total gains amounting to 64,500 however there were a number of investments which were not successful, accumulating total losses of 16,500 John wants to sell his shares in the next two months. Required: Advise John and Ada how they could sell all of the shares over the two month period from 01 March 2021 to 30 April 2021 and incur no CGT liability, assuming there is no change in the value of the shares held. 5 marks Total: 15 marks II. Question 10: Capital Gains Tax this question has two parts. Parta) Nancy is a higher rate taxpayer and resident in the UK. During the tax year to 5 April 2021 Nancy made the following asset disposals. 1. On 10 May she gifted to her granddaughter a diamond ring. The ring cost Nancy 2,400 and was valued at 11,900 On 16 May she gifted her grandson her two-year old Honda Civic. The car had cost Nancy 16,985 and had a book price of 12,000 On 23 May she sold a commercial property for 330,000. Selling fees were 1,650 and legal fees were 700. She had purchased the property in March 2001 for 120,000, incurring stamp duty of 2,400, legal fees of 450 and survey costs on 320 On 22 August she sold a painting for 3,000. It had originally cost 500 v. On 8 November she sold a garden statue for 1,200. It had originally cost 9,000 but was badly weather-damaged. Required: Calculate Nancy's Capital Gains Tax liability for the year to 5 April 2021 and state when any capital gains tax liability would be payable III. IV. 10 marks Part b) Assume today's date is 1 March 2021. You are a trainee accountant and have been asked to advise a client, John Osei, on how to minimise a capital gains tax liability. John is a retired doctor, married to Ada. Both are in their eighties and both are basic rate taxpayers. In the early years of his retirement John spent time investing in the stock market and has built up a portfolio of shares. The portfolio was generally successful with total gains amounting to 64,500 however there were a number of investments which were not successful, accumulating total losses of 16,500 John wants to sell his shares in the next two months. Required: Advise John and Ada how they could sell all of the shares over the two month period from 01 March 2021 to 30 April 2021 and incur no CGT liability, assuming there is no change in the value of the shares held. 5 marks Total: 15 marks