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Froster has chargeable gains of £15,000 for the tax year 2016-17, and capital losses of £500. His wife Fiorrin sold a piece of land for £10,000 in December 2016., which was part of a larger plot purchased in 1995 for £3,000 and not used for private residence. The remaining part of the land had a value of £30,000 in December 2016.

Froster's taxable income is £31,800 for the tax year 2016-17.
Fiorrin's taxable income is £12,000 for the tax year 2016-17.

Required:

(i) Compute the capital gains tax liabilities for both Froster and Fiorrin for 2016-17.

(ii) Explain the treatment of capital gains for spouses or civil partners and what happens to any unused annual exemption for capital gains tax purposes. Show all the working on the answer booklet.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92826854

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