Neil has been loaned a caravan by hisemployer. The market value at the date itwas loaned to him was £30,000, on 6thApril 2021. On 6th April 2023 he bought itfrom his employer for £2,000, on whichdate the market value is estimated to be£8,000. What will be Neil's taxable benefitin respect of this asset for 2023/24?Question 11Select one: a. £6,000 b. £16,000 c. £30,000 d. £22,000

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eil has been loaned a caravan by his mployer. The market value at the date it was loaned to him was £30,000, on 6th pril 2021. On 6th April 2023 he bought it

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Neil has been loaned a caravan by his
employer. The market value at the date it
was loaned to him was £30,000, on 6th
April 2021. On 6th April 2023 he bought it
from his employer for £2,000, on which
date the market value is estimated to be
£8,000. What will be Neil's taxable benefit
in respect of this asset for 2023/24?
Question 11Select one: a. £6,000 b
. £16,000 c. £30,000 d. £22,000

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