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    Bhuvan Bhatia
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    Rajesh had a capital gain of £48,000 from non-residential property in 2022/23. After deducting allowable losses of £6,000 and the annual exemption of £12,300, his taxable gain was £29,700. He owes £5,010 in capital gains tax, calculated at 10% on gains up to £10,700 and 20% on gains between £10,700 and £29,700. Rajesh is planning to sell a house for £400,000 that cost £100,000 and has been owned for 9 years, 40 months of which was used as his primary residence. He will qualify for private residence relief on 49/108 (40+

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    Rajesh had a capital gain of £48,000 from non-residential property in 2022/23. After deducting allowable losses of £6,000 and the annual exemption of £12,300, his taxable gain was £29,700. He owes £5,010 in capital gains tax, calculated at 10% on gains up to £10,700 and 20% on gains between £10,700 and £29,700. Rajesh is planning to sell a house for £400,000 that cost £100,000 and has been owned for 9 years, 40 months of which was used as his primary residence. He will qualify for private residence relief on 49/108 (40+

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    10 views1 page

    2019 Paper

    Uploaded by

    Bhuvan Bhatia
    Rajesh had a capital gain of £48,000 from non-residential property in 2022/23. After deducting allowable losses of £6,000 and the annual exemption of £12,300, his taxable gain was £29,700. He owes £5,010 in capital gains tax, calculated at 10% on gains up to £10,700 and 20% on gains between £10,700 and £29,700. Rajesh is planning to sell a house for £400,000 that cost £100,000 and has been owned for 9 years, 40 months of which was used as his primary residence. He will qualify for private residence relief on 49/108 (40+

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    of 1

    Diposal 670K

    Cost 300k
    Gain 370K
    New land 620k

    Chargeable gain NOW (670k - 620K) = 50K


    Gain rolled over 370K - 50K = 320K

    Compute Rajesh’s capital gains tax liability for 2022/23 on the assumption that net
    gains
    were £48,000 (all of which related to ‘other’ non-residential property) and that he
    had
    unrelieved allowable capital losses at 5 April 2022 of £6,000. His taxable income
    for
    2022/23 after deducting the personal allowance was £27,000.

    Gain 48,000
    (-)Allowable Loss -6000
    (-)Annual Exemption -12,300
    Charegable gain 29,700

    10% x 10,700(37700 - 27000) 1,070


    20% x 19,700(29,700 - 10,700) 3,940
    CGT 5,010

    (c) Rajesh is contemplating the sale of a house for around £400,000. It cost
    £100,000. The
    total period of ownership of the house would be nine years. Rajesh and his wife
    occupied
    the house as their main residence for the first 40 months of ownership and since
    then it has
    been let out to tenants. It is unlikely that the house will be reoccupied before
    the sale.
    During the time since the letting started, Rajesh and Dipa have had another
    property which
    qualifies as their main residence.
    Advise Rajesh on the chargeable gain that is likely to arise on the sale and show
    any
    available reliefs. You should include an estimate of the chargeable gain.

    A.
    Diposal 400k
    Cost -100K
    Gain 300K
    (-) PPR
    (40+9)/108 x 300K -136K
    Chargeable GAIN 164K

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