What is Woo's chargeable gain in respect of the sale of the three hectares of land to her son? O £23,200 O £1,200 O £38,300 O £5,600
What is Woo's chargeable gain in respect of the sale of the three hectares of land to her son? O £23,200 O £1,200 O £38,300 O £5,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Hugh and Woo are a married couple. They disposed of the following assets during
the tax year 2022-23:
Freehold warehouse
On 27 April 2022, Hugh sold a freehold warehouse for £220,000. The warehouse had
been purchased on 22 March 2005 for £82,000. Hugh used 70% of this warehouse
for business purposes. However, the remaining-30% of this warehouse was never
used for business purposes.
Hugh has made a claim to rollover the gain on the warehouse against the
replacement cost of a new freehold warehouse which was purchased on 23 April
2022 for £250,000. The replacement warehouse is used entirely for business
purposes.
Rare vintage book
On 4 May 2022, Hugh sold a rare vintage book for £4,800. The selling costs were
£480, so Hugh actually received net proceeds of £4,320.
The book had been purchased on 10 March 2015 for £7,200.
Three hectares of land
On 10 June 2022, Hugh gifted his three hectares of land to Woo (his wife). On that
date, the land was valued at £56,400.
Hugh's father had originally purchased the three hectares of land for £23,700. Hugh
inherited the land at a value of £38,800 when his father died.
On 6 January 2023, Woo sold the three hectares of land to her son for £40,000. On
that date, the market value of the land was £62,000.
Ordinary shares in Nuu plc
On 2 February 2023, Woo sold 7,000 £1 ordinary shares in Nuu plc. She has had the
following transactions in the shares of Nuu plc:
9 May 2017
6 June 2019
15 February 2023
21 March 2023
Purchase
Sale
Purchase
Purchase
10,000 shares for £23,000
2,000 shares
4,000 shares for £15,200
1,000 shares for £4,200
Transcribed Image Text:What is Woo's chargeable gain in respect of the sale of the three hectares of land to her son?
O £23,200
O £1,200
O £38,300
O £5,600
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