PART B

Seven years ago, the company$$s CEO, Roger Sainsbury purchased a house near

the coast which he only makes available for use by his sister who suffers from ill

health. The purchase price was $$3$ million and Roger Sainsbury was required to pay

$$50,000$ agent$$s commission and $$230,000$ stamp duty on the transfer. He borrowed

money from a bank to fund the purchase price and paid $$700,000$ in interest on the

loan. In February $2023,$ he also paid $$80,000$ to a builder to renovate the bathrooms.

In addition he paid $$40,000$ in legal fees to make an objection blocking a proposed

development nearby which would have obstructed the house$$s charming beach

views. In $2023,$ Roger was forced to sell the property due to financial difficulties. On

$7$ June $2023$ Roger Sainsbury entered into a contract of sale of the property to a

developer at the market value of $$4$ million. Roger also incurred $$5,000$ legal fees

and $$50,000$ agent$$s commission in relation to the sale. Settlement occurred in

August $2023.$ he capital gains tax $($CGT$)$ implications in relation to the sale of the house

near the coast, arising from the facts in PART B$.$ In your answer make sure

you identify any relevant CGT Event, identify each element of the cost base

and show your calculation of any relevant capital gain$/$loss$.$