QUESTION 2

2 (a) For a capital gains tax clearance to be processed Mr Dube and Shumba should present to Zimra when applying the
following information as follows:

(1) An agreement of Sale (Both copy and originals)

(2) Deed of transfer /Tittle deeds of the plot (Copy and originals)
(3) Fully completed Capital Gains Tax form (CGT1)
(4) Completed ZIMRA registration form (REV 1)

2 (bi) Dube and Shumba

Calculation of amounts to be included in the gross income of their business ended 31 December 2023 as a result of
their business assets.

Amounts ($)
Recoupment on : $
Staff Housing (40 00-0) 40 000
Permanent roads (10 000-2 500) 7 500
Temporary garden sheds -
Office building (30 000-27 000) 3 000
Furniture & Office Equipment (50 000-0) 50 000
Dam and boreholes -
Tractors(45 000-11 250) 33 750
134 250

2(bii) Dube and Shumba

Calculation of Capital gains tax CGT payable on the disposal of immovable bussiness assets at year ending
31 December 2024
Amounts Amounts
$ $
Sale proceeds of :
Land 100 000
Staff housing 100 000
Permanent roads 20 000
Dams & Boreholes 70 000
Office building 50 000

Total gross sales proceeds 340 000

Less Recoupment
Staff housing 40 000
Permanent roads 7 500
Office building 3 000
(50 500)
 Less cost of :
Land 50 000
Staff housing 40 000
Permanent roads 10 000
Dams & Boreholes 35 000
Office building 30 000
(114 500)

Less Inflation Allownce on :

Land ( 2.5%*50 000*5years) 6 250
Staff housing (2.5%*40 000*5years) 5 000
Permanent roads (2.5%*10 000*4years) 1 000
Dam & Boreholes (2.5%*35 000*5years) 4 375
Office Building (2.5%*30 000*5years) 3 750
(20 375)
Selling Commission (10%*340 000) (34 000)
Capital Gain 120 625

2 .(c) Capial gains tax reliefs available to Dube and Shumba as a result of the disposal of homestead includes.

1. Capital gains will not be charged on principle private residence by Dube and Shumba who is 55 years at at date
of sale /transfer since Dube is 58 years old.

2.where proceeds are used to acquire/construct a new pricipal private residence i.e where Dube and shumba signed
for aquisation of a new home in Southview, Mutare for $200 000.