Machinery was purchased for $90,000 in 1991 Initial Allowance of $36,000 and Annual Allowance of $18,000 was granted. Machinery was sold in 1992 for $100,000.
A motor car was purchased for $90,000 on 1st January 1991. Wear and Tear Allowance of $54,000 was granted. The motor car was sold for $100,000 on 31st December 1992.
A capital loss occurs when the value arising from the change of ownership of an asset is less than the cost of acquisition of that asset or the market value as at 1st January 1991, whichever is later.
A capital loss may also arise on the redemption of any shares, debentures or other obligations and from the dissolution of a business or the liquidation of a company.
Capital allowances granted under the provisions of the Income Tax (In Aid of Industry) Act, 81:02, wear and tear allowance granted under the Income Tax Act, Chapter 81:01, are taken into consideration when computing capital gain.
For More information check the Guide to Capital Gains Tax.