11 CGT

Question 1

Difference between CGT and IHT

Answer 1

CGT is asset value and IHT on loss to estate

Question 2

Chattels and Wasting Assets

Answer 2

1 Chattels less than £6K exempt
2 If > £6K then 5/3 of excess is gain
Wasting assets (<50 years life) exempt exempt plant and m/c in business

Question 3

Examples of CGT exemtions

Answer 3

1) Main Res
2) Private Motor Vehicles
3) NS&I certs and prem bonds
4) gambling winnings
5) iSA
6) Growth in VCT and EIS
7) Disposal to charity or housing association

Question 4

CGT Exemption on selling home

Answer 4

18 months exemption if 2nd home
36 months if going into care home
Letting exemption for CGT £40K each

Question 5

Losses

Answer 5

can be carried forward against future gains until exhausted

Lossed not reported to HMRC unless >4 times annual exemption

Question 6

Indentifaction rules for shares, units etc

Answer 6

1 Acquisition on same day
2 Acquisitions within 30 days
3 Acquisitions in the share pool

Question 7

CGT 6 main Reliefs

Answer 7

1 Entrepreneurial Relief £10M @ 10%
2 Holdover 
3 Business Roll Over
4 Roll over 
5 EIS
6 Seed EIS

Question 8

Entrepreneurial Relief and Investor Relief

Answer 8

£10M @ 10% trading business
Property at 20%
Asset for at least 1 year
at least 5% share holding, employee 
Need at least 80% trading activities

Investor Relief for employees newly issued share after 16/3/

Question 9

Business Rollover Relief

Answer 9

into a trading business within 3 years

Question 10

CGT Calculation Process

Answer 10

1 Disposal
2 Disposal Proceeds
3 Less costs of Disposal
4 Less cost of Acquisition
5 Less enhancement costs
6 Chargeable Gains
7 Add any gains/losses for same tax year
8 Deduct Annual exemption
9 Apply carry forward losses
10 Calc rates at 10%, 18%, 20% and 28%
11 Pay CGT