Compute the tax liabilities on the total income. Compute the tax liabilities on the total income. Assume the company is a wholly owned Nigerian company

Alright glorydaniel, let's tackle Question Two regarding Glory and Daniel Hotels Limited. This question focuses on Capital Gains Tax (CGT) for the disposal of artworks.

Part 1: Capital Gains Tax Calculation for the First Disposal

Step 1: Determine the total allowable cost for the first set of artworks. The artworks were acquired in 2022. $Cost of acquisition = N19,200,000$ $Installation costs = N1,200,000$ $Total Allowable Cost = N19,200,000 + N1,200,000 = N20,400,000$

Step 2: Determine the disposal proceeds for the first set of artworks. The artworks were disposed of in July 2023. $Disposal Proceeds = N19,200,000$

Step 3: Calculate the capital gain or loss for the first disposal. $Capital Gain/(Loss) = Disposal Proceeds - Total Allowable Cost$ $Capital Gain/(Loss) = N19,200,000 - N20,400,000 = -N1,200,000$ This results in a capital loss of N1,200,000.

Part 2: Capital Gains Tax Calculation for the Second Disposal

Step 1: Determine the total allowable cost for the second set of artworks. The second set of artworks was acquired in August 2023. $Cost of acquisition = N22,500,000$

Step 2: Determine the net disposal proceeds for the second set of artworks. The artworks were disposed of in May 2026, with financial details presented in August 2026. $Sale proceeds = N15,100,000$ $Auctioneer's commission = 1.5\% \times N15,100,000 = 0.015 \times N15,100,000 = N226,500$ $Net Disposal Proceeds = N15,100,000$ $Total Allowable Costs (Acquisition and Disposal) = N22,500,000 + N226,500 = N22,726,500$

Step 3: Calculate the capital gain or loss for the second disposal. $Capital Gain/(Loss) = Net Disposal Proceeds - Total Allowable Costs$ $Capital Gain/(Loss) = N15,100,000 - N22,726,500 = -N7,626,500$ This results in a capital loss of N7,626,500.

Part 3: Total Capital Gains Tax Payable

Since both disposals resulted in capital losses, and in Nigeria, capital losses can only be carried forward to offset future capital gains (they cannot be offset against other income or result in a tax refund), there is no Capital Gains Tax payable for Glory and Daniel Hotels Limited for these transactions.

$Total Capital Gains Tax Payable = \mathbf{N0}$