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apr 2012 q5

Discussion in 'SP5' started by dimitris13, Mar 14, 2020.

  1. dimitris13

    dimitris13 Member

    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
     
    Last edited by a moderator: Mar 16, 2020
    dimitris13, Mar 14, 2020
    #1
  2. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    Your question is not clear: I think you missed a word "is the coming from .."
     
    Colin McKee, Mar 16, 2020
    #2
    dimitris13 likes this.
  3. dimitris13

    dimitris13 Member

    corrected
     
    dimitris13, Mar 16, 2020
    #3
  4. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    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.
     
    Colin McKee, Mar 16, 2020
    #4
    dimitris13 likes this.
  5. dimitris13

    dimitris13 Member

    so my question is different then.. what is depreciating assets?
     
    dimitris13, Mar 16, 2020
    #5
  6. Colin McKee

    Colin McKee ActEd Tutor Staff Member

    I think the examiner just meant that there is a reduction in the tax charge.
     
    Colin McKee, Mar 17, 2020
    #6

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