(Total 30 marks) 2 Jordan Southgate is 52 years old, and UK resident During the 2019 20 tax year, Jordan made a number of disposals and now requires your assistance in explaining the tax implications and any resulting tax liability On 31 January 2020 he sold his house for 450,000 He had purchased it for 140,000 on 1 August 1992 In September 1998 he spent 50,000 on extensive refurbishments to the property He occupied the house from 1 August 1992 to 31 July 2000 On 1 August 2000, he went travelling around South East Asia, returning to live at the property on 1 January 2005 During this period of absence, the property was rented to tenants Jordan lived in the property from 1 January 2005 to 30 September 2015, at which point he left to go and live elsewhere The house then remained vacant until sale On 1 March 2020, Jordan sold 10,000 shares in Wembley Ltd for 100,000 The full history of his investment, to date, is set out below Cost (Proceeds) Date No () 14 02 97 Acquisition 500 500 12 04 02 Rights Issue 4 1 1 50 p sh 04 03 07 Acquisition 6,000 12,000 19 09 17 Bonus Issue 3 1 01 03 20 Disposal (10,000) (100,000) 03 03 20 Acquisition 1,000 9,500 15 03 20 Acquisition 3,000 27,800 5R6Z0039 2021 R Page 5 11 In March 2020, Jordan sold a motorbike for 8,000 He bought the motorbike for 3,000 in 2018 Question 2 continues on the next page Question 2 continued In April 2020, Jordan sold the following items on eBay Gross Proceeds (f) Cost Antique Wardrobe 9,100 7,300 Diamond Brooch 8,200 5,100 Rare Atlas Collection 3,000 6,500 All proceeds are gross figures, before paying 5 auction fees Other Information During the 2019 20 tax year, Jordan had rental profits of 17,000 and other investment income of 10,000 Jordan had capital losses brought forward at 6 April 2019 of 8,000 Required (a) Calculate Jordan's CGT liability for 2019 20 You must show all your workings clearly and explain your treatment of the various disposals For the purpose of your calculations, the personal allowance for 2019 20 is 12,500 (20 marks) (b) The Capital Gains Tax system in the UK is completely skewed in favour of couples who choose to get married This is grossly unfair 5R6Z0039 2021 R Page 6 11 (Total 30 marks) 2 Jordan Southgate is 52 years old, and UK resident During the 2019 20 tax year, Jordan made a number of disposals and now requires your assistance in explaining the tax implications and any resulting tax liability On 31 January 2020 he sold his house for 450,000 He had purchased it for 140,000 on 1 August 1992 In September 1998 he spent 50,000 on extensive refurbishments to the property He occupied the house from 1 August 1992 to 31 July 2000 On 1 August 2000, he went travelling around South East Asia, returning to live at the property on 1 January 2005 During this period of absence, the property was rented to tenants Jordan lived in the property from 1 January 2005 to 30 September 2015, at which point he left to go and live elsewhere The house then remained vacant until sale On 1 March 2020, Jordan sold 10,000 shares in Wembley Ltd for 100,000 The full history of his investment, to date, is set out below Cost (Proceeds) Date No () 14 02 97 Acquisition 500 500 12 04 02 Rights Issue 4 1 1 50 p sh 04 03 07 Acquisition 6,000 12,000 19 09 17 Bonus Issue 3 1 01 03 20 Disposal (10,000) (100,000) 03 03 20 Acquisition 1,000 9,500 15 03 20 Acquisition 3,000 27,800 5R6Z0039 2021 R Page 5 11 In March 2020, Jordan sold a motorbike for 8,000 He bought the motorbike for 3,000 in 2018 Question 2 continues on the next page Question 2 continued In April 2020, Jordan sold the following items on eBay Gross Proceeds (f) Cost Antique Wardrobe 9,100 7,300 Diamond Brooch 8,200 5,100 Rare Atlas Collection 3,000 6,500 All proceeds are gross figures, before paying 5 auction fees Other Information During the 2019 20 tax year, Jordan had rental profits of 17,000 and other investment income of 10,000 Jordan had capital losses brought forward at 6 April 2019 of 8,000 Required (a) Calculate Jordan's CGT liability for 2019 20 You must show all your workings clearly and explain your treatment of the various disposals For the purpose of your calculations, the personal allowance for 2019 20 is 12,500 (20 marks) (b) The Capital Gains Tax system in the UK is completely skewed in favour of couples who choose to get married This is grossly unfair 5R6Z0039 2021 R Page 6 11

Question

(Total 30 marks) 2  Jordan Southgate is 52 years old, and UK resident  During the 2019 20 tax year, Jordan made a number of disposals and now requires your assistance in explaining the tax implications and any resulting tax liability  On 31 January 2020 he sold his house for 450,000  He had purchased it for 140,000 on 1 August 1992  In September 1998 he spent 50,000 on extensive refurbishments to the property  He occupied the house from 1 August 1992 to 31 July 2000  On 1 August 2000, he went travelling around South East Asia, returning to live at the property on 1 January 2005  During this period of absence, the property was rented to tenants  Jordan lived in the property from 1 January 2005 to 30 September 2015, at which point he left to go and live elsewhere  The house then remained vacant until sale  On 1 March 2020, Jordan sold 10,000 shares in Wembley Ltd for 100,000  The full history of his investment, to date, is set out below  Cost   (Proceeds) Date No () 14 02 97 Acquisition 500 500 12 04 02 Rights Issue 4 1   1 50 p sh  04 03 07 Acquisition 6,000 12,000 19 09 17 Bonus Issue 3 1 01 03 20 Disposal (10,000) (100,000) 03 03 20 Acquisition 1,000 9,500 15 03 20 Acquisition 3,000 27,800 5R6Z0039 2021 R Page 5 11 In March 2020, Jordan sold a motorbike for 8,000  He bought the   motorbike for 3,000 in 2018  Question 2 continues on the next page Question 2 continued  In April 2020, Jordan sold the following items on eBay  Gross Proceeds (f) Cost  Antique Wardrobe 9,100 7,300 Diamond Brooch 8,200 5,100 Rare Atlas Collection 3,000 6,500 All proceeds are gross figures, before paying 5  auction fees  Other Information  During the 2019 20 tax year, Jordan had rental profits of 17,000 and other investment income of 10,000  Jordan had capital losses brought forward at 6 April 2019 of 8,000  Required  (a) Calculate Jordan's CGT liability for 2019 20  You must show all your workings clearly and explain your treatment of the various disposals  For the purpose of your calculations, the personal allowance for 2019 20 is 12,500  (20 marks) (b)  The Capital Gains Tax system in the UK is completely skewed in favour of couples who choose to get married  This is grossly unfair   5R6Z0039 2021 R Page 6 11 (Total 30 marks) 2  Jordan Southgate is 52 years old, and UK resident  During the 2019 20 tax year, Jordan made a number of disposals and now requires your assistance in explaining the tax implications and any resulting tax liability  On 31 January 2020 he sold his house for 450,000  He had purchased it for 140,000 on 1 August 1992  In September 1998 he spent 50,000 on extensive refurbishments to the property  He occupied the house from 1 August 1992 to 31 July 2000  On 1 August 2000, he went travelling around South East Asia, returning to live at the property on 1 January 2005  During this period of absence, the property was rented to tenants  Jordan lived in the property from 1 January 2005 to 30 September 2015, at which point he left to go and live elsewhere  The house then remained vacant until sale  On 1 March 2020, Jordan sold 10,000 shares in Wembley Ltd for 100,000  The full history of his investment, to date, is set out below  Cost   (Proceeds) Date No () 14 02 97 Acquisition 500 500 12 04 02 Rights Issue 4 1   1 50 p sh  04 03 07 Acquisition 6,000 12,000 19 09 17 Bonus Issue 3 1 01 03 20 Disposal (10,000) (100,000) 03 03 20 Acquisition 1,000 9,500 15 03 20 Acquisition 3,000 27,800 5R6Z0039 2021 R Page 5 11 In March 2020, Jordan sold a motorbike for 8,000  He bought the   motorbike for 3,000 in 2018  Question 2 continues on the next page Question 2 continued  In April 2020, Jordan sold the following items on eBay  Gross Proceeds (f) Cost  Antique Wardrobe 9,100 7,300 Diamond Brooch 8,200 5,100 Rare Atlas Collection 3,000 6,500 All proceeds are gross figures, before paying 5  auction fees  Other Information  During the 2019 20 tax year, Jordan had rental profits of 17,000 and other investment income of 10,000  Jordan had capital losses brought forward at 6 April 2019 of 8,000  Required  (a) Calculate Jordan's CGT liability for 2019 20  You must show all your workings clearly and explain your treatment of the various disposals  For the purpose of your calculations, the personal allowance for 2019 20 is 12,500  (20 marks) (b)  The Capital Gains Tax system in the UK is completely skewed in favour of couples who choose to get married  This is grossly unfair   5R6Z0039 2021 R Page 6 11

Accepted Answer

The Answer is in the image, click to view ...

(Total 30 marks) 2. Jordan Southgate is 52 years old, and UK resident. During the 2019/20 tax year, Jordan made a number of disposals and

Step by Step Solution

Step: 1

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Students explore these related Accounting questions