Question

1. During 2019/20, John sold and gifted the following assets:

a) sold the old Factory on 10/1/2020 and purchased another replacement Factory on 20/4/2020, both used for business purposes. He is wishing to claim Rollover Relief for the gain from the sale of Factory.

b) He gifted Quoted shares of ABC plc to his daughter and wishing to claim Gift Relief.

c) He gifted his Factory to his daughter and wishing to claim Gift relief.

Explain the conditions to claim the various reliefs and connect it to the case study given above. Advise him with the reasons which gain is not eligible to claim any relief and why for a,b and c?

Answer 1

Answer:-

A.sold the old Factory on 10/1/2020 and purchased another replacement Factory on 20/4/2020, both used for business purposes. He is wishing to claim Rollover Relief for the gain from the sale of Factory.

As John has sold a factory and again invest such sale consideration in replacement of factory within the same financial year then as per the capital clause of reinvestment in industrial establishment, reinvestment in the industrial establishment will provide capital gain exemption benefit.

B. He gifted Quoted shares of ABC plc to his daughter and wishing to claim Gift Relief.

As per clause of Income from other sources, Gift provided in blood relation will not be taxable.

C. He gifted his Factory to his daughter and wishing to claim Gift relief.

As per clause of Income from other sources, Gift provided in blood relation will not be taxable.

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