BL - Tax - Individual CGT

Question 1

When is CGT charged?

Answer 1

Where there is:
- a chargeable disposal,
- of a chargeable asset,
- by a chargeable person,
- which gives rise to a chargeable gain

Question 2

Is there a chargeable disposal on death for CGT purposes?

Answer 2

No

Question 3

What are the main types of asset excluded for CGT purposes?

Answer 3

• Principle Private Residence
• Cars
• Government securities, ISAs and life assurance policies
• GBP

Question 4

Is CGT chargeable on donations to charities?

Answer 4

No

Question 5

Is CGT chargeable on disposals to spouses?

Answer 5

No

Question 6

Who are connected persons for CGT purposes?

Answer 6

• Persons lineal ancestors and descendants (including each of their spouses) 👨‍👧
• Companies under common control 🏭
• Partners in business 🎩🎩

Question 7

What value is brought into charge for CGT if a sale is undervalue between unconnected parties?

Answer 7

Will still be market value unless its just a bad deal

Question 8

What are the categories of allowable expenditure for CGT

Answer 8

• the cost price of the asset
• the incidental costs of acquisition
• Subsequent expenditure on the asset WHICH ENHANCES ITS VALUE
• Expenditure incurred in ESTABLISHING, PRESERVING OR DEFENDING TITLE to the asset
• Incidental costs of disposal

Question 9

What is the Annual Exempt Amount for individuals

Answer 9

£3,000

Note: companies do not get an AEA

Question 10

What are the rates of CGT

Answer 10

When income fall within the basic rate = £10%
Otherwise = 20%
Residential = 24%
If CGT takes the taxpayer out of the basic rate, then the gain is apportioned between rates.