RPGT - Acquistion Price
3 important questions on RPGT - Acquistion Price
What is the acquisition price of an asset?
The acquisition price of an asset is the value of the consideration paid (in money or money's worth) by the owner wholly and exclusively for the acquisition of the asset. Add: the incidental costs to him of the acquisition. This exclude interest on loan.
What are the types of recoveries deducted from the acquisition price?
Less: Recoveries include:
- (a) compensation received for damage
- (b) insurance receipt for damage to the loss, destruction or depreciation of the asset
- (c) deposit forfeited made in connection with an intended transfer of the asset.
How is the acquisition price broken down?
The acquisition price can be broken down as follows:
- Consideration paid
- Add: incidental costs of acquisition
- Less: Recoveries - exclude revenue receipt which is taxed under ITA/exclude compensation received NOT in connection of disposal/damage to the RP i.e. compensation from a business contract.
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