William Baker, an academic, specializes in the field of development economics. He works at a university in Canberra. William has 20 years of professional experience in this field and his research work on economic governance in failed states and developing nations is widely acknowledged. On 5 May 2021, Asian Development Bank offers William a five-year position as Chief Economist (Central & South Asia) at the Bank's headquarters located in Manila, Philippines. William agrees to take the prestigious role at the Bank and leaves for Manila on 25 June 2021. Before relocation to the Philippines, William disposes off the following assets in Canberra:

William has a capital loss of $5,000 from previous years on sale of shares.

One of the clauses of contract with the Bank prohibits William from providing consultancy or other services to any institution in the Central and South Asian region for a period of two years after completion of his five-year term. In exchange for the prohibition, the Bank pays William a lump sum amount of $30,000 in advance on 30 June 2021.

Required: Advise William of the CGT consequences for each transaction, and citing relevant legislation and case law, calculate his net capital gain (or loss) for the income year 2020-21.

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Asset Sale information Purchase Other information information Block of land Gifted to daughter $138,000; At the time of gift, on 15 June 2021; purchased in March the market value the title of the land 2015 of land was came under dispute $250,000 after William purchased the block and he incurred $12,000 expense on litigation to settle the dispute $1,150,000; sold on Inherited in 2008; The property valued $625,000 Commercial 10 June 2021; $6,000 paid as brokerage fee paid $14,000 as stamp duty on acquisition + $5,000 property at the time of inheritance as council rates during the ownership period $16,000; purchased Shares in Aussie $18,000; sold on 2 Pharma (Pty) Ltd. June 2021 15 June 2020 $5,000; sold on 20 $8,500; purchased TV (Sony XR Master Series) June 2021 on 12 July 2019 Asset Sale information Purchase Other information information Block of land Gifted to daughter $138,000; At the time of gift, on 15 June 2021; purchased in March the market value the title of the land 2015 of land was came under dispute $250,000 after William purchased the block and he incurred $12,000 expense on litigation to settle the dispute $1,150,000; sold on Inherited in 2008; The property valued $625,000 Commercial 10 June 2021; $6,000 paid as brokerage fee paid $14,000 as stamp duty on acquisition + $5,000 property at the time of inheritance as council rates during the ownership period $16,000; purchased Shares in Aussie $18,000; sold on 2 Pharma (Pty) Ltd. June 2021 15 June 2020 $5,000; sold on 20 $8,500; purchased TV (Sony XR Master Series) June 2021 on 12 July 2019

Answer rating: 100% (QA)

Answer 1 Since where a person gifts to another person an asset that they have already owned for some ... View the full answer