no.7: James, a resident of UK has sold and gifted the following assets during the tax year 2019/20: a) Sale of Main Residence: James purchased a house (main Residence) on 1 January 2002 for 40,000 and sold it on 31 December 2019 to his brother for 100,000, after completing the ownership of 216 months. The market value of the residence on the date of sale was 300,000. James purchased the house on 1/1/2002 and stayed in it till 31/12/2003 (24 months) and went abroad for employment purposes for another 60 months till 31/12/2008. While coming back to UK, he went to his Aunty's house and stayed there for 12 months till 31/12/2009. Then he came back to house and stayed for 36 months till 31/12/2012. Then he left his house for employment purposes within UK for 84 months till 31/12/2019 and sold his house without visiting his house before the sale. b) Sale of Painting: James sold a painting which he purchased in 2016 for 8,000. He sold the same on 2 January 2020 for 3000 and at the time of sale he incurred selling expense of 10% c) James sold his jewellery on 10 January 2020 for 8,000, the cost of it was 5,000 in 2015. d) Sale of Factory: James has been doing business from so many years, on 15 February 2020, he sold his factory for 120,000, which he used 75% for business purposes. The cost of the factory was 50,000. Immediately, he reinvested 140,000 in new factory, which he will use fully for business purposes. c) Gift of Shares: on 1 July 2019, James sold 1000 shares of Angle Ltd, an unquoted company to his brother for 25,000. The market value on the date of gift was 50,000 James has purchased the shares on 23 April 2013 for 19,000 1) The brought forward capital loss is 10,000, which is still to be adjusted You are required to: Calculate Capital Gain for each of the above sale. Show the working and notes clearly. marks) (ii) Calculate the Taxable Gain and Capital Gain Tax of James for the tax year 2019/20, after claiming available Relief wherever applicable. State the due date for payment of Capital Gain Tax for the tax year 2019/20. Assume that James has taxable income of 40,000 for the tax year 2019/20. Show all workings clearly. Tax Summary Capital Gain Tax for Tax year 2019/20 If the Capital gain is within Basic rate Band (37,500) If the Capital gain exceeds the Basic rate Band Normal Assets Residential Property 10% 18% 20% |28% Tax on Capital gains qualifying Entrepreneurs Relief = 10% Annual Exemption = 12,000 Capital allowances: General Pool (Main Pool) - WDA Annual Investment Allowances (AIA)(per annum) 18% 1,000,000 no.7: James, a resident of UK has sold and gifted the following assets during the tax year 2019/20: a) Sale of Main Residence: James purchased a house (main Residence) on 1 January 2002 for 40,000 and sold it on 31 December 2019 to his brother for 100,000, after completing the ownership of 216 months. The market value of the residence on the date of sale was 300,000. James purchased the house on 1/1/2002 and stayed in it till 31/12/2003 (24 months) and went abroad for employment purposes for another 60 months till 31/12/2008. While coming back to UK, he went to his Aunty's house and stayed there for 12 months till 31/12/2009. Then he came back to house and stayed for 36 months till 31/12/2012. Then he left his house for employment purposes within UK for 84 months till 31/12/2019 and sold his house without visiting his house before the sale. b) Sale of Painting: James sold a painting which he purchased in 2016 for 8,000. He sold the same on 2 January 2020 for 3000 and at the time of sale he incurred selling expense of 10% c) James sold his jewellery on 10 January 2020 for 8,000, the cost of it was 5,000 in 2015. d) Sale of Factory: James has been doing business from so many years, on 15 February 2020, he sold his factory for 120,000, which he used 75% for business purposes. The cost of the factory was 50,000. Immediately, he reinvested 140,000 in new factory, which he will use fully for business purposes. c) Gift of Shares: on 1 July 2019, James sold 1000 shares of Angle Ltd, an unquoted company to his brother for 25,000. The market value on the date of gift was 50,000 James has purchased the shares on 23 April 2013 for 19,000 1) The brought forward capital loss is 10,000, which is still to be adjusted You are required to: Calculate Capital Gain for each of the above sale. Show the working and notes clearly. marks) (ii) Calculate the Taxable Gain and Capital Gain Tax of James for the tax year 2019/20, after claiming available Relief wherever applicable. State the due date for payment of Capital Gain Tax for the tax year 2019/20. Assume that James has taxable income of 40,000 for the tax year 2019/20. Show all workings clearly. Tax Summary Capital Gain Tax for Tax year 2019/20 If the Capital gain is within Basic rate Band (37,500) If the Capital gain exceeds the Basic rate Band Normal Assets Residential Property 10% 18% 20% |28% Tax on Capital gains qualifying Entrepreneurs Relief = 10% Annual Exemption = 12,000 Capital allowances: General Pool (Main Pool) - WDA Annual Investment Allowances (AIA)(per annum) 18% 1,000,000