on 1 June 1991, Mrs. Pickle purchased a house in East Anglia for 205,050. She lived in the house until 31 December 1991 when she travelled to the North Africa and the Middle East (MENA) region for humanitarian work.

After living in the MENA region for four (4) years, she returned to occupy the East Anglian house again on 1 January 1997. Mrs. Pickle lived in this house until 30 June 2018 before moving out to live with her parents in Derby. The house was sold on 31 December 2020 for 760,000.

Required:

1. Calculate Mrs. Pickles capital gains tax payable for the 2020-21 tax year.

Note: Assume the only disposal made by Mrs. Pickle in the tax year is this building and that she is a higher rate taxpayer.

[20 Marks]

2. Briefly explain how the period that Mrs. Pickle lived in her parents house in Derby will be treated for tax purposes.

[5 Marks]