Tx notes fa22 Final

June 2023 to March 2024 exams
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Answer to Example 7
 
 
As Charles reinvested all of the proceeds from the sale of the freehold factory in a 55 year leasehold 
factory, a depreciating asset, the entire gain may be held over. 
The held over gain on the sale of the factory in June 2022 becomes chargeable in 2023/24, as the 
depreciating asset has been sold in February 2024. 
The capital gain is £200,000 (£500,000 - £300,000). 
A further gain of £40,000 (640,000 - 600,000) arises on the sale of the leasehold factory. 
Business asset disposal relief is not available as Charles did not dispose of the whole business.
Answer to Example 8 
David has made a disposal in September 2022 as follows:
Tommy has a deemed base cost to set against a future disposal, calculated as follows.
£
Market value of asset
100,000
Less: Cost
(60,000)
40,000
Less: Gift holdover relief
(40,000)
Revised gain
NIL
£
Market value of asset acquired
100,000
Less: gain deferred
(40,000)
60,000

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June 2023 to March 2024 exams
Watch free ACCA TX lectures
Answer to Example 9
 
 
 
 
(a)
Richard – Chargeable gain on shares sold at undervalue in March 2023
(b)
Richard’s son – Base cost
£
£
Market value of shares in March 2023
200,000
Less cost
(60,000)
Capital Gain
140,000
Less: Gain deferred
Capital gain
140,000
Less: Proceeds received – actual cost (85,000 – 60,000)
(25,000)
(115,000)
Revised gain eligible for business asset disposal relief
255,000
Less AEA
(12,300)
Taxable gain
242,700
CGT @ 10%
£1,270
£
Market value of shares in March 2023
200,000
Less: Gain deferred
(115,000)
Base cost
85,000

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264
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