Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Roll over relief
- This topic has 2 replies, 2 voices, and was last updated 8 years ago by Adam.
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- June 5, 2016 at 12:57 pm #319598
How is roll over relief dealt with when asset sold is only partially used for trade? ordinarily If there is a 100k sale of an asset that had an index cost 50k there will be a 50k gain. If a replacement asset is then purchased for 100 or more the full amount is rolled over.
If only 75k was spend on a replacement asset there would be 25 immediate gain and 25k roles over.
If 50k spent on new asset then full gains realised.
However if it was only used for trade for half it’s ownership, the maximum that can be roles over is 25k.
How much does the new asset need to cost to cover max relief.
Is it 75k as that would cover enough of sale as 25k can’t be rolled over anyway, or is it only 50k as the trade element and non trade element are treated.differently with the trade aspect ignored for the roll over calc. meaning the revenue is 50k and gain 25k.
Hope that it clear? I am taking p6 not f6 but not forum for that.
Thanks in advance
June 6, 2016 at 2:34 am #319710The sale proceeds relating to the trade use is 50% x 100K = 50K.
This is the amount that must then be reinvested to allow the 25K to be deferred
Good luck with your P6 examJune 6, 2016 at 11:49 am #319828Thanks.
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