Abena Morgan acquired two mansions (one at East Legon, Accra, and the other at Kwadaso, Kumasi) on 1 January 2010 at the cost of GH¢2,000,000 and GH¢11,500,000 respectively. Abena Morgan lives in the property at East Legon. On 10 March 2019, she used GH¢2,500,000 to convert part of this dwelling house into a self-contained flat and sold it to her younger brother for GH¢3,300,000.
The property at Kwadaso in Kumasi consists of two (2) detached bungalows, and she sold one of the bungalows to her elder sister for GH¢6,300,000, also on 10 March 2019.
The market value of the apartment sold to her younger brother at the time of sale was GH¢4,000,000, while the market price of the bungalow sold to her elder sister was GH¢8,750,000. She had used GH¢1,950,000 to refurnish the bungalow that was sold to her sister. The market price of the unsold bungalow on 10 March 2019 was GH¢11,000,000.

Required:
Compute the capital gains tax payable by Abena Morgan. (5 marks)

Item Amount (GH¢)
Sale of Self-Contained Flat
Market Value of Flat 4,000,000
Cost of Conversion (2,500,000)
Capital Gain on Flat 1,500,000
Sale of Bungalow
Market Value of Bungalow 8,750,000
Cost (Proportionate) (5,094,937)
Refurbishing Cost (1,950,000)
Capital Gain on Bungalow 1,705,063
Total Capital Gains 3,205,063
Capital Gains Tax @ 15% 480,759
online
Knowsia AI Assistant

Conversations

Knowsia AI Assistant