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Partial disposal of asset (Eg 9, page 81)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Partial disposal of asset (Eg 9, page 81)

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Tax Tutor.
Viewing 2 posts - 1 through 2 (of 2 total)
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  • June 1, 2017 at 10:29 pm #389590
    aamir2111
    Participant
    • Topics: 123
    • Replies: 85
    • ☆☆☆

    Dear Tutor,
    In the subject example, suppose cost of 10hectares of land 26,000, ST sold 2hects for 16000. The ramining 8 hects valued at 34000. However, if ST incurred lets say 2000 as incidental sales cost, then how do we calculate the chargeable gain?
    Is it going to be as follows:-
    Since GROSS proceed from disposal is 16000,
    Allowable cost = 26000 X (16000/ 16000+34000) = 8320.
    Chargeable gain = 16000 – 8320 – 2000(i.e. incidental cost) = 5,680.
    Or is it going to be something else?

    June 2, 2017 at 5:07 am #389611
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    yes you do a normal gains calculation deducting selling expenses from SP and then use the part disposal calculation to compute the allowable cost to then be deducted

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