CAPITAL GAINS TAX QUESTIONS

Question 1
Mr. Charles Gumbo a resident of Zimbabwe got a job in South Africa in December 2019. He
decided to sell his shareholding of 20,000 shares in Bravo (Private) Limited, an unlisted
Zimbabwean company. The shares were valued at $15 a share on the date of sale and the shares
had been purchased on 1 March 2019 for $3 a share. He paid brokerage commission of 2% on the
amount in connection with the sale. On 20 November 2019, he again donated his 1,000 shares in
Econet Wireless, a company listed on the Zimbabwe Stock Exchange. The market value of these
shares was $300 each on date of donation. The 1,000 shares had been acquired in April 2018 for
$30 000.
Required
a) Calculate the capital gains payable by Mr. Charles Gumbo on the shares from Bravo (Private)
limited.
b) Calculate capital gains tax on the Econet Wireless shares

Question 2
Mrs. Rose bought a flat in Harare on 11 April 2019 at a cost of $6 000000. She repainted the flat
in May 2019 at a cost of $420 000 and in September 2019 she constructed a brick wall surrounding
the house for $720 000. She put burglar bars and a driveway in January 2020 at a cost of $108 000
and $96 000 respectively. In February 2020 her employer transferred her to Bulawayo. She
advertised the Harare flat on 1 March 2020 and thus incurred $9 000 advertising costs. She
managed to get a buyer on 11 March and sold the property for $10 800 000 Wobron Real Estate,
the estate agents who facilitated the sale, charged her 5% as agent‘s commission. The estate agent
also withheld 15% withholding tax.
Required
Calculate her capital gains tax payable or refundable, if any
Question 3
A 50 year old retail shop was destroyed by fire on 25 March 2020, it had been bought on 1 March
2019 for $250 000. The compensation was received on 1 May 2020 and the building was replaced
on 30 December 2020. Consider the following:
Compensation Cost of
Sale
Received Replacement Price
1. $550,000 $600,000 $1,000,000
2. $350,000 $200,000 $800,000
The building was sold during the year ended 31st December 2021.
Required
Calculate the Capital gains, if any for 2020 & 2021 tax years.
Question 4
Mr. and Mrs. Moyo married in December 2018. Mr. Moyo bought a house in Hatfield, Harare, in
March 2019 at a cost of $70,000. Subsequently he made the following additions to the house:
 Domestic Quarters (May 2019) $20,000
 Electrified Durawall (June 2019) $10,000
 Drive Way (July 2019) $ 5,000
Mr. and Mrs. Moyo divorced in January 2020. The court awarded the house to Mrs. Moyo who
has custody of the couple„s two minor children. The market value of the house was $100,000. On
10th March 2020, Mrs. Moyo sold the house, put the children in a boarding school and immigrated
to England. The selling price of the house was $135,000. And she incurred the following selling
expenses:
a) Repainting (5 March 2020) $1,000
b) Agents commission $6,750
Calculate the capital gains tax due to be paid by Mrs. Moyo on the above transactions assuming
an election had been made in terms of Section 16 of the Capital Gains Act.
Question 5
In the year ended 31 December 2020, a taxpayer sold a property for $60,000 under a suspensive
sale agreement payable $40,000 in this year and $20,000 in the second year. The property had been
acquired in December 2016 for $40,000.
Calculate CGT as 31 December 2020.
Question 6
Guy Shoes (Private) Limited constructed a factory for $3 600 000 on its premises in June 2019.
An election for Special Initial Allowance, at 25% of cost, was made for the year ended 31
December 2019. In February 2020, the factory was completely destroyed by fire following an
electrical fault. At this stage, the factory was comprehensively insured for $7 800 000. The
company was able to claim the full amount from its insurer in June 2020. Insurance proceeds were
used to acquire a replacement factory for $6 000 000 in July 2020.
In November the company decided to sell the factory because of the unfavourable business
environment. The replacement factory was now sold for $7 200 000 in December 2020.
REQUIRED
Calculate the capital gains tax payable, if any, by Prim Shoes (Private) Limited for the ended 31
December 2014. (15 MARKS)
Calculate the income tax payable for the year ended 31 December 2014.
(5 MARKS)

Question 7
In May 2022, Mr. Plant who is 45 years of age and carried on operations as a market gardener,
decided to sell the property and to buy a house in the city as his new personal private residence.
The small holding consisting of 5 hectares, his homestead and improvements and certain movable
assets were sold for $31 800 000. The agreed apportionment of the selling price was:
$
Land - $40 000 per hectare 12 000 000
Homestead 18 000 000
Greenhouse and sheds 1 200 000
Pumps and tools 600 000
31 800 000
The land has been purchased in March 2019 at a cost of $1 200 000 per hectare, $6 000 000.
In August 2019, the homestead where Mr. Plant subsequently lived was built at a cost of $12 000
000.
In April 2020, a borehole was sunk at a cost of $360 000.
In July 2020, Mr. Plant constructed a greenhouse at a cost of $1 500 000.
In September 2022 Mr. Plant purchased a house in Borrowdale at a cost of $15 000 000 as his new
principal private residence.
REQUIRED
You are required to prepare Mr. Plant capital gains tax computation and calculate any capital gains
tax liability.
Question 8
Zuvarabuda (Pvt) Ltd submitted its capital gains tax returns for the year ended 31 December 2012
with the following information:
a) Details of the property sold: Cost ITV 01‐01‐2022
Warehouse (purchased 31 July 2019) 7 500 000 6 375 000
Stand (purchased 1March 2019) 1 500 000 1 500 000
Office block (purchased 28 August 2020) 15 000 000 14 250 000
The properties were sold on 15 October 2022.
The selling price of $60 000 000 is payable in instalments as follows: 15 October 2022 deposit of
$30 000 000
15 October 2023 1st instalment $15 000 000
15 October 2024 2nd instalment $15 000 000
The selling price was allocated as follows:
Warehouse $18 000 000
Stand $6 000 000
Office block $36 000 000

As security for the seller, the transfer of ownership will only be affected upon payment of the last
and final instalment.
Agents commission is 2, 5% of selling price
As a statutory requirement, withholding tax is withheld at a stipulated rate.
Required:
Compute the gains tax payable/assessed capital loss for the 3 years in question. [25 marks]