capital gains and inheritance tax

Question 1

who pays capital gains tax and what is it charged on

Answer 1

payable by individuals, individual partners, trustees and prs. it is a tax on an increase in an assets value during a period of ownership. it is charged on chargeable gains made by a chargeable person on disposal of a chargeable asset.

Question 2

what can be deducted from the disposal value to calculate a basic gain

Answer 2

the acquisition cost and allowable expenditure are deduceted from the sale price to give the basic gain.

exemptions and reliefs are then applied to give the chargeable gain and this is taxed at the appropriate rate.

Question 3

true or false - the annual exemption can only be used when tax is paid. it cannot be used when a gain is being held over, rolled or deffered

Answer 3

true -

Question 4

true or false - a higher rate taxpayer will pay VGT at a higher rate on all their chargeable gains?

Answer 4

false - will be entitled to use up the basic rate first to the extent that a taxable income does not exceed the basic rate band.

Question 5

true or false, shares are not qualifying assets for the purpose of business asset disposal relief and an individual will not usually pay cgt on the gain in value of their main home

Answer 5

shares are not qualifying assets for the purpose of business asset relief and an individual will not usually pay cgt on the gain in value of their main home.