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Please provide me the solution of this question..
Mr Taylor is conerned about selling his private houses as it has a value of 300,000. as he has already sold this tax year a painting for 100,000 before paying or selling fees of 10%, and 5000 for getting it all cleaned up and reframed. Could advise Mr Taylor as he has earned income of 30,000 but could recieve an additional pension income of 20,000 this tax year if he wishes to. He has also sold chattels of 5,000 in this tax year. Please advise Mr Taylor about Capital Gains tax and possible methods to reduce or remove his CGT liability this tax year ending 5 April 2014 and What is his CGT liability?
private houses as it has a value of 300,000. claim PPR relief, gain = 0
painting 100,000 before paying or selling fees of 10%, and 5000 for getting it all cleaned up and reframed.
Proceeds = 100,000
Less selling fees (10,000)
Cleaned and reframed is revenue expenditure so does not affect CGT
Gain = 90,000Chattels are exempt from CGT (assumed it was a wasting chattel) gain = 0
Lower rate band remaining 41,050 – 30,000 = 11,050
tax due on painting 90,000
less AE (10,900)
Taxble gain 79,100lower rate rate 11,050 x 18% = 1,989
higher rate 68,050 x 28% = 19,054
Total CGT = 21,043Could advise Mr Taylor as he has earned income of 30,000 but could recieve an additional pension income of 20,000 this tax year if he wishes to.
Please advise Mr Taylor about Capital Gains tax and possible methods to reduce or remove his CGT liability this tax year ending 5 April 2014 and What is his CGT liability?
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