9. Chattels And Private Residence Flashcards
What is a chattel?
Tangible moveable property
What happens if the cost is < £6000 and the proceeds are < £6000v
The item is exempt
What happens if the cost is > £6000 and the proceeds are
You restrict the loss
Gross proceeds =£6000
What happens if the cost is < £6000 and the proceeds are >£6000?
You choose the lower of:
- normal gain
- 5/3 X ( gross sale proceeds - £6000)
What happens if the cost is > £6000 and the proceeds are > £6000?
Normal capital gains disposal calculation
How is private residence determined?
By periods of occupation of the property. Properties owned but not lived in by the owner are fully chargeable to CGT.
What are the residential rates of capital gains tax?
Lower rate = 18%
Higher rate = 28%
How do you calculate principle private residence relief?
(Period of occupation / total period of ownership) X gain
What can be considered deemed occupation?
- The last 18 months provided the property was lived in by the tax payer at some point.
- Any period the taxpayer was overseas due to employment
- Any period (up to 4 years) the taxpayer was employed to work elsewhere in the UK
- Any period (max 4 years) self employed taxpayer had to work away from home
- Any period what ever reason not exceeding 3 years
When can a period be considered to be deemed occupation
If the meet the criteria and are preceded and followed by actual occupation.