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Hi
I have following issues with kaplan exam kit (2011)
*question 36 FORWARD LTD
(W3) ordinary Shares in Backward plc cost was calculated at 12895. When
you go to workings you can see disposal is calculated as 5000/9000 and then cost is shown as (12895) – how did they calculate 5/9 x 24500 = 12895?*question 29 ALICE LIM
a) freehold office building – why rolled over relief (41,000) is deducted from cost of 134,000 and it actually increases the gain calculated? Why relief is increasing the gain?
Normally the gain would be 152,000-134000= 18,000 and now with relief (41,000) this gain is actually HIGHER at 59,000?
Please, can someone help me with this..
hi,
Since it calculates cost separately from cost indexation allowance.
cost for ( 9000+500) =18,000+6500=24500you sell 5000 shares from 9500–> cost of 5,000 shs = 5000/9500*24,500= 12895
There was a error there in their answer ( typo)Q29–
There were two transactions, you need to separate them from each other
1) disposal first building, it has realized gain = 56,000
because he bought second building ( they both are for business) so he can claim roll over relief. Plus his second building cost him less than the money he received from his first building ( he received 149,000 and he spent 134,000). so the diff = 149,000 -134,000= 15,000 will be immediately chargeable.the remaining gain = 56,000 ( given in the question) less the immediate chargeable gain 15,000 =
56,000-15,000=41,000 can be rolled over to the second buildingthe second building cost = 134,000
less roll over relief (41,000)
base cost = 93,000so when he sold second building
disposal proceeds=152,000
less base cost (93.000)
Chargeable gain =59,000
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hi,
many many thanks
🙂
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