Hello, Can someone please help?
NORMAN PURCHASED UNQUOTED SHARES IN A COMPANY FOR $ 50,000 IN nov 2009,.IN JAN 2016, HE SOLD TO HID GRANDSON FOR $ 70,000 WHEN THEIR VALUE WAS $ 165,000. NORMAN AND HIS GRANDSON CLAIMED GIFT RELIEF.
RECALCULATE THE GAIN MADE BY NORMAN IF THE ASSET WAS SOLD FOR $ 40,000 INSTEAD OF $ 70,000.
Why is is that for the disposal made by Bill, we deduct $ 21,000 gift relief from the cost of $ 40,000? William made that gift, so he gets a relief of 60% business use, but why is that deducted for Bill??
Disposal $ 60,000 $ 60,000
Cost (40,000-21,000) $ (19,000) (40,000)
Chargeable gains $ 41,000 20,000
a/e ($11,100) (11,100)
taxable gains $ 29,900 8,900
8900= less tax compared to $ 29,900, so why is that deducted for Bill??
Thank you for your help.