QUESTION

Your client Mikael Jones had the following capital transactions during 2020/21 and also wanted to know about Business Asset Disposal Relief:

Mikael sold an office building in October 2020; relevant details are as under:

Cost in January 2009 400,000

Enhancement expenditure - December 2018 128,000

Sale proceeds 750,000

In May 2020, Mikael intends to acquire another office building costing 700,000 All assets are used for business purposes throughout their periods of ownership.

Solution: Write letter to Mikael Jones in which you

a)Calculate the chargeable gain arising on the sale of the office building

b)Discuss whether Mikael is entitled to any deferral relief and, if so, how the relief will be granted.

c) Discussing the availability of Business Asset Disposal Relief in the disposal of business assets.