apr 2012 q5

[dimitris13]

hi there
the solutions mention that for country B CGT =15%*(2500+4500+5000+(1-25%)×1500)
The question mentions that depreciating assets can offset 25% of value from any tax payable. automobile has not been depreciated. is this coming from the automobile (if so why) or is it coming from depreciation of property investment(500) and share port (1000) which is 1500 in total so mathematically is the same ?

thanks

 

[Colin McKee]

Your question is not clear: I think you missed a word "is the coming from .."

 

[dimitris13]

Your question is not clear: I think you missed a word "is the coming from .."

corrected

 

[Colin McKee]

The question indicates that automobiles ARE depreciated:
Depreciating assets (includes automobiles) can offset 25% of value from any tax payable.
So the 1500 is the automobiles and the 1-0.25 is the depreciation.

 

[dimitris13]

The question indicates that automobiles ARE depreciated:
Depreciating assets (includes automobiles) can offset 25% of value from any tax payable.
So the 1500 is the automobiles and the 1-0.25 is the depreciation.

so my question is different then.. what is depreciating assets?

 

[Colin McKee]

I think the examiner just meant that there is a reduction in the tax charge.