19. Capital gains tax

Question 1

What assets are exempt from CGT? (10)

Answer 1

• Main residence
• Cars
• Cash
• Foreign currency for personal use
• Investments in ISAs
• QCBs
• Securities
• Some chattels
• Inventory
• Receivables
• Prize betting/ winnings

Question 2

When do you use MV insteal of disposal proceeds in a CGT comp?

Answer 2

Where not made at an arms length - to a relative.

Question 3

Allowable expenses to deduct again gain? (4)

Answer 3

• acquisition costs
• improvement costs (not redec.)
• expenses to establish, preserve or defend title
• incidental costs to purchase of asset

Question 4

Difference between chargeable and taxable gain

Answer 4

Chargeable: before AEA and b/f capital losses.
Taxable: after deductions

Question 5

Rates of CGT

Answer 5

10 and 20%: Normal rate.

18 and 28&: Residential prop.

Question 6

Capital losses should be offset against what first?

Answer 6

Residential properties

Question 7

UK residential property disposals:

Disposals made after ……….. must be reported to HMRC within ……………………. along with a ………………………………. which is determined by an ……………………

Answer 7

Disposals made after 06TH APRIL 2020 must be reported to HMRC within 30 DAYS OF COMPLETION along with a PAYMENT ON ACCOUNT OF CGT LIABILITY which is determined by an ESTIMATE OF INCOME AT POINT OF DISPOSAL

Question 8

In the event of residential property disposals, what must you remember to do?

Answer 8

Reduce CGT liability by POA

Question 9

When is CGT due?

Answer 9

31 Jan following end of tax year