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Chatels when proceeds exceed 6000 and but cost less than 6000

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Chatels when proceeds exceed 6000 and but cost less than 6000

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by Tax Tutor.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 25, 2021 at 12:17 am #607825
    Burningdesire
    Member
    • Topics: 14
    • Replies: 14
    • ☆

    Hi Sir

    when proceeds exceed 6000 and cost less than 6000 do we use the higher of the 5/3 formula result against the proceeds or the lower off? In this example 10, the answer has written both answers down but not stated what answer i should choose if it was a objective question? Do i choose the lowest answer of the two?

    Painting – non wasting chattel
    Normal calculation
    £
    Disposal proceeds 10,000
    Cost (2,000)
    Chargeable gain 8,000
    Restricted to 5?3 [10,000 – 6,000] = £6,667

    January 26, 2021 at 9:04 am #608046
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    It does give the answer – what is an actual gain of 8,000 is restricted to 6,667!!
    The 5/3 calculation is clearly stated in the notes and lectures as being the MAXIMUM gain so if lower than the actual gain it is used!

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