9. Chattels And Private Residence

Question 1

What is a chattel?

Answer 1

Tangible moveable property

Question 2

What happens if the cost is < £6000 and the proceeds are < £6000v

Answer 2

The item is exempt

Question 3

What happens if the cost is > £6000 and the proceeds are

Answer 3

You restrict the loss

Gross proceeds =£6000

Question 4

What happens if the cost is < £6000 and the proceeds are >£6000?

Answer 4

You choose the lower of:

• normal gain
• 5/3 X ( gross sale proceeds - £6000)

Question 5

What happens if the cost is > £6000 and the proceeds are > £6000?

Answer 5

Normal capital gains disposal calculation

Question 6

How is private residence determined?

Answer 6

By periods of occupation of the property. Properties owned but not lived in by the owner are fully chargeable to CGT.

Question 7

What are the residential rates of capital gains tax?

Answer 7

Lower rate = 18%

Higher rate = 28%

Question 8

How do you calculate principle private residence relief?

Answer 8

(Period of occupation / total period of ownership) X gain

Question 9

What can be considered deemed occupation?

Answer 9

• 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

Question 10

When can a period be considered to be deemed occupation

Answer 10

If the meet the criteria and are preceded and followed by actual occupation.