Capital Gains

Question 1

Who are chargeable persons ?

Answer 1

Individuals who are resident in the uk

Business partners who are each responsible for their share of the chat due on capital gains of a partnership

Trustees of a trust settlement

The personal representatives of a deceased person

Question 2

Chargeable asset exemptions

Answer 2

Taxpayers principal private residence

Motor cars

Chattels sold for £6000 or less

Gilt edged securities

National savings and premium bonds

Winnings from pools, lotteries, betting

Question 3

Chargeable disposals

Answer 3

Sale of an asset other than the sale of stock in the course of trade

Sale of part of an asset

The gift of all or part of an asset

The loss or destruction of an asset

The receipt of a capital sum delivered from a chargeable asset

Question 4

Non chargeable disposals

Answer 4

Sale of trading stock

Gifts to charities, art galleries or museums

Disposal caused by the death of the taxpayer

Question 5

Basis of assessment

Answer 5

Persons CGT liability for a tax year is based upon the chargeable disposals made by that person during the tax year

Net gains = total gains - total losses

The annual exemption is £12,300

Question 6

Rates of CGT

Answer 6

Standard rate 10%
Higher rate 20%

Depending on the size of the individual’s taxable income

Rates rise to 18% and 28% in case of residential property gains

Business disposal relief are always taxed at 10%

Question 7

Losses

Answer 7

Net losses are carried forward without time limit and are set against net gains of future years

Losses in year of death can be carried back and offset on net gains of the past three tax years