Query on Capital Gains taxation

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This query is : Resolved

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This discussion clarifies capital gains tax calculation when selling both land and a house purchased and sold in the UK. The advice given is that the capital gain should be calculated in aggregate for both the land and the building. The cost of constructing the house is treated as a cost of improvement, and the total sale proceeds are considered for the overall gain.

Ravi B L Gowda

Ravi B L Gowda (Querist)
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03 July 2024 Dear Sir,
My query is as below
My friend had purchased a Land in 2013 for Rs.600000 & house constructed in the same year. House & land sold in 2023 for Rs.33.50 Lakhs.

My query is whether capital gain is to be calculated separately for land & building & whether cost of construction of building is to be treated as cost of improvement.

Kindly advise.

With Regards
Ravi

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 July 2024 Capital gain to be calculated in aggregate. Yes construction cost can be added in aggregate cost of building as you have transferred building.

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CA SUNIL SURI

CA SUNIL SURI (Expert)
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03 July 2024 Sales Consideration will be taken Rs.33.50 Lakh (aggregate value of land & building). and cost of construction of the house will be the cost of improvement.

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Ravi B L Gowda

Ravi B L Gowda (Querist)
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04 July 2024 Dear sir, Thank you for your advise.

Ravi

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 July 2024 You are welcome.

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