Question
Sean, a higher rate income taxpayer, made FIVE capital disposals in the year ended 5 April 2021. His disposals were : Disposal One A residential
Sean, a higher rate income taxpayer, made FIVE capital disposals in the year ended 5 April 2021. His disposals were :
Disposal One
A residential property sold for 340,000 (before selling fees). This had been owned for 12 years and used as his main residence for the first 2 years and the last 6 months. In between it had been let-out to tenants while Sean lived elsewhere. During the early years of Seans absent from the property he worked abroad for 2 years and 3 months. The cost of the property including legal fees on purchase was 236,000. The incidental selling costs of the property were 4,000.
Disposal Two
One antique silver candlestick from a set of four candlesticks sold for 28,000. The whole set had cost him 40,000 when he purchased them 9 years earlier. The remaining three candlesticks that Sean retained at the time of the sale were valued at 70,000.
Disposal Three
A vintage motor car, which was in working order, was sold for 45,000. The car had cost 28,000 twelve years earlier.
Disposal Four
An interest in a partnership trading business (which qualified for Business Asset Disposal Relief) sold for 70,000. The interest had cost him nothing.
Disposal Five
A copyright sold for 25,000. The copyright was purchased for 24,000 when it had 12 years to run. At the date of sale it only had 4 years left to run.
Sean had a capital loss brought forward at 6 April 2020 of 6,000. Until this year, he had not used any of his lifetime limit for Business Asset Disposal Relief.
Required
- Calculate the gains and losses arising from the disposals. (10 Marks)
- Calculate Seans CGT liability for the year ended 5 April 2021.
(5 Marks)
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