hoped, and he made a trading loss of £8,000 in the year to 31 March 2007. However, trading is now improving,
and Donald has sufficient orders to ensure that the business will make profits of at least £30,000 in the year to
31 March 2008.
In order to raise funds to support his business over the last 15 months, Donald has sold a painting which was
given to him on the death of his grandmother in January 1998. The probate value of the painting was £3,200,
and Donald sold it for £8,084 (after deduction of 6% commission costs) in November 2006.
H.e also sold other assets in the year of assessment 2006/07, realising further chargeable gains of £8,775 (after
indexation of £249 and taper relief of £975).
Required:(i) Calculate the chargeable gain on the disposal of the painting in November 2006. (4 marks)
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