Chapter 9 - Calculation of Capital Gains

Question 1

Calculation of Gains

Answer 1

In the most basic sense:

proceeds - acquisition cost = gain

Question 2

Proceeds of Sale

Answer 2

Proceeds of sale is the amount from the sale less any incidental costs of selling the asset

Question 3

Acquisition Costs

Answer 3

Includes allowable costs and expenses. Inherited assets are treated as being acquired at probate value. Associated expenses (commission, stamp duty) can also be included

Question 4

Enhancement Expenditure

Answer 4

Any expenditure which enhances the value of the asset is deductible. Best example is an extension on a house

Question 5

Date of Disposal

Answer 5

Disposal takes place for CGT when the contract is signed