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Pre- June Mock 2022

This topic has 1 reply, 2 voices, and was last updated 8 months ago by Tax Tutor.

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June 5, 2022 at 7:45 pm #657472
sahersk
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In March 2016, Finlay bought a painting for £75,000. In November 2021 it was damaged by smoke in a fire. In December 2021 it was valued at £60,000 and Finlay received compensation from the insurance company of £20,000 for the damage. Finlay spent none of the money on restoration.
What is the chargeable gain or allowable loss arising on the receipt of the compensation?
The answer is 1250 Gain but I am not able to understand how. Could you please help me out.
June 6, 2022 at 1:20 pm #657524
Tax Tutor
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Please refer to the study notes and if necessary the accompanying lectures. See Section 2 of Chapter 20 on page 116 of the study notes – clearly where the taxpayer is an individual there will be no indexation allowance
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