Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of...

 

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Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable assets in the year to 31 March 2022: (1) In February 2022, a rare Bentley motor car used by the company's Managing Director was sold for £750,000. This car had cost £300,000 in November 2005. (ii) In October 2021, an office building was sold for £680,000. The building had been acquired in January 1979 for £100,000 and was extended in July 1981 at a cost of £10,000 and again in September 1988 at a cost of £40,000. The market value of the building on 31 March 1982 was £135,000. (iii) In June 2021, a plot of land was sold for £120,000. This land had cost £42,000 in November 2004 and had been used for trade purposes. In June 2005, the company had sold land for £50,000 and had made a claim for rollover relief in relation to this disposal. This land had cost £10,000 in October 1999 and had been used for trade purposes. (iv) In August 2021, gilt-edged stocks bought for £100,000 in January 2008 were sold for £110,500. (v) In June 2021, plant and machinery which was bought for £19,500 in August 2020 was sold for £22,500. In March 2022, plant and machinery bought for £16,000 in March 2017 was sold for £9,000. Capital allowances had been claimed in relation to both of these items. (vi) In February 2022, the company sold 500 ordinary shares in Theta plc for £10 per share. Timberlake Ltd had bought ordinary shares in Theta ple as follows: £ June 2001 January 2008 Bought 2,500 shares Bought 3,000 shares Timberlake Ltd has elected that assets acquired before 31 March 1982 should be treated as if acquired on 31 March 1982 at a cost equal to their market value on that date. The company had capital losses brought forward of £156,200 on 1 April 2021. Required: September 1988 October 1999 June 2001 November 2004 12,500 18,000 (a) Compute the chargeable gain or allowable loss arising on each of the disposals made during the year to 31 March 2022. Assume Retail Price Indices as follows: March 1982 79.44 June 2005 108.4 166.5 174.4 189.0 November 2005 January 2008 March 2017 December 2017 192.2 193.6 209.8 269.3 278.1 (b) Compute the chargeable gains figure which should be included in the company's taxable total profits for the year to 31 March 2022. Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable assets in the year to 31 March 2022: (1) In February 2022, a rare Bentley motor car used by the company's Managing Director was sold for £750,000. This car had cost £300,000 in November 2005. (ii) In October 2021, an office building was sold for £680,000. The building had been acquired in January 1979 for £100,000 and was extended in July 1981 at a cost of £10,000 and again in September 1988 at a cost of £40,000. The market value of the building on 31 March 1982 was £135,000. (iii) In June 2021, a plot of land was sold for £120,000. This land had cost £42,000 in November 2004 and had been used for trade purposes. In June 2005, the company had sold land for £50,000 and had made a claim for rollover relief in relation to this disposal. This land had cost £10,000 in October 1999 and had been used for trade purposes. (iv) In August 2021, gilt-edged stocks bought for £100,000 in January 2008 were sold for £110,500. (v) In June 2021, plant and machinery which was bought for £19,500 in August 2020 was sold for £22,500. In March 2022, plant and machinery bought for £16,000 in March 2017 was sold for £9,000. Capital allowances had been claimed in relation to both of these items. (vi) In February 2022, the company sold 500 ordinary shares in Theta plc for £10 per share. Timberlake Ltd had bought ordinary shares in Theta ple as follows: £ June 2001 January 2008 Bought 2,500 shares Bought 3,000 shares Timberlake Ltd has elected that assets acquired before 31 March 1982 should be treated as if acquired on 31 March 1982 at a cost equal to their market value on that date. The company had capital losses brought forward of £156,200 on 1 April 2021. Required: September 1988 October 1999 June 2001 November 2004 12,500 18,000 (a) Compute the chargeable gain or allowable loss arising on each of the disposals made during the year to 31 March 2022. Assume Retail Price Indices as follows: March 1982 79.44 June 2005 108.4 166.5 174.4 189.0 November 2005 January 2008 March 2017 December 2017 192.2 193.6 209.8 269.3 278.1 (b) Compute the chargeable gains figure which should be included in the company's taxable total profits for the year to 31 March 2022.

Answer rating: 100% (QA)

a Compute the chargeable gain or allowable loss arising on each of the disposals made during the yea... View the full answer