Bank interest and cgt on insurance.

Uusmanw14y ago

Respected tutor,

1. Can you please clarify that whether interest on bank and debentures are assessed on accrual or cash basis!

2. If our asset is damaged (cost $200000) and we receive insurance proceeds of $50000. We used $35000 of the insurance on the asset. What is the capital gain tax complication (if we make election to dis-apply part disposal)!

Thanks

TTTax Tutor14y ago#1

For individuals interest is taxed on the amount received in the tax year but for companies the amount receivable in the accounting period

Reinvesting < 95% of the proceeds from insurance on damaged assets is not in the F6 syllabus. In F6 The whole amount of the insurance will be reinvested and so we elect there is no gain but the proceeds are deducted from the original cost on a future disposal of the asset.
Hope this helps

Sign into reply to this topic.