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RPGT - Disposal Price

Q: What is the formula for calculating chargeable gain?

Chargeable gain is calculated as: Chargeable gain = disposal price – acquisition price Disposal price > acquisition price = chargeable gain Disposal price < acquisition price = allowable loss Disposal price = acquisition price = No gain, no loss (NGNL)

Q: How is the disposal price of an asset determined?

Disposal price of an asset is: The value of the consideration (in money or money’s worth) Less: (a) Expenditure enhancing asset value post-acquisition (b) Expenditure preserving /defending title (c) Incidental costs of disposal

Q: When would expenses not be considered for RPGT?

Qualifying as allowable expense in arriving at adjusted income/loss would not be considered for RPGT . Interest expenses are specifically disallowed by the public ruling.

Q: What incidental costs are not considered incidental?

Quit rent and assessment, and interest on loan are not considered incidental costs.

Q: What should be disregarded if the enhancement cost(EC) is no longer in existence at disposal time?

It is disregarded if existence is totally gone . EC must be capital expenditure (e.g., renovation, agricultural) Cannot be revenue expenditure (e.g., repairs of pipes)

6 important questions on RPGT - Disposal Price

What does incidental cost exclude for income tax purposes?

Incidental cost excludes 'expenses allowable'/'would have been allowable' for income tax purposes, such as quit rent & assessment deductible against rental income under the ITA 1967.

What is the formula for calculating chargeable gain?

Chargeable gain is calculated as:

Chargeable gain = disposal price – acquisition price
Disposal price > acquisition price = chargeable gain
Disposal price < acquisition price = allowable loss
Disposal price = acquisition price = No gain, no loss (NGNL)

How is the disposal price of an asset determined?

Disposal price of an asset is:

The value of the consideration (in money or money’s worth)
Less: (a) Expenditure enhancing asset value post-acquisition
(b) Expenditure preserving/defending title
(c) Incidental costs of disposal

When would expenses not be considered for RPGT?

Qualifying as allowable expense in arriving at adjusted income/loss would not be considered for RPGT. Interest expenses are specifically disallowed by the public ruling.

What incidental costs are not considered incidental?

Quit rent and assessment, and interest on loan are not considered incidental costs.

What should be disregarded if the enhancement cost(EC) is no longer in existence at disposal time?

It is disregarded if existence is totally gone.

EC must be capital expenditure (e.g., renovation, agricultural)
Cannot be revenue expenditure (e.g., repairs of pipes)

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ATX

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RPGT - Disposal Price

6 important questions on RPGT - Disposal Price

What does incidental cost exclude for income tax purposes?

What is the formula for calculating chargeable gain?

How is the disposal price of an asset determined?

When would expenses not be considered for RPGT?

What incidental costs are not considered incidental?

What should be disregarded if the enhancement cost(EC) is no longer in existence at disposal time?

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