Capital Gains Tax

Question 1

Gilt Edged Securities?

Answer 1

Exempt

Question 2

qualifying corporate bonds

Answer 2

exempt

Question 3

national savings certificates and premium bonds

Answer 3

exempt

Question 4

shares and investments held in an ISA

Answer 4

exempt

Question 5

part disposal

Answer 5

mv of part disposed/ total mv’s

Question 6

a current year loss must be….

Answer 6

set of against current year gains to the fullest extend even if this wastes ae or creates an overall loss (this overall loss is then c/f)

Question 7

B/f losses?

Answer 7

set against it AFTER current year losses and ae

Question 8

s.64 claim?

Answer 8

once this claim has been made can then elect to offset rest against capital gains- which is = to the lower of

• unrelieved tradin losses
• gains after cy losses and bf losses BUT NOT after the ae

Question 9

what is a connected person?

Answer 9

a spouse/civil partner

Question 10

disposals between spouses?

Answer 10

on a no gain no loss basis

Question 11

What are connected persons?

Answer 11

- trustees of trust in which individual was settlor
children and s
parent and s
siblings and s
spouses :
siblings and spouse
parents and spouse

Question 12

disposal to connected person?

what if it’s a loss?

Answer 12

AT MV

Can only be offset when a gain arises with that same connected person

Question 13

gifts of quoted shares

Answer 13

lower quoted price + 1/2 (higher quoted price-lower quoted price)

Question 14

what is the normal due date for CGT payment?

Answer 14

31 Jan following tax year of disposal

Question 15

when can cgt be paid in instalments?

Answer 15

when its in respect of land or shares in an unquoted company or from a controlling interest in any company. Paid in 10 instalments, which are interest bearing. Starting on the normal due date

Question 16

UK res property payments?

Answer 16

from 6 april 2020, they must file a uk land return together with a payment on account of the cgt within 30 days of completion. this is taxpayers best estimate of the cgt that would be due in relation to uk residential property disposals to date in ty.

Question 17

what is a qualifying asset for roll over relief?

Answer 17

Used in trade!!!
L and B
p and m
goodwill (individuals only- not companies)

Question 18

what are the rules for ror?

Answer 18

asset must be acquired 1 year before or 3 years after

Question 19

when is ror restricted?

Answer 19

for non business use= only business proportion

when not ass reinvested

Question 20

when the replacement asset is a depreciating asset?

Answer 20

base cost of asset not reduced by rollover: gain frozen until:
disposal of replacement asset
10 years after acqn
replacement asset ceases to be used in the taxpayers trade
depreciating asset is one with an expected life of 60 years or less
p and m always treated as this unless its part of a building in which case it will depend on whether the buildings lease is less than 6 years

Question 21

whatt is gift relief available on?

Answer 21

BUSINESS ASSSETS!!
- need at least 5% of voting rights
shares and securities- unquoted or donors personal company: NOT on the gift of shares where the donee is a company

Question 22

how does gift relief work?

Answer 22

deducting gain from the base cost of the asset for the donee

Question 23

gift relief when the company holds some investments?

Answer 23

CBA/CA

Question 24

BADR

All or part of a trading bsiness?

Answer 24

qualifies IF they have owned for a period of two years ending with the date of disposal

Question 25

BADR

shares and securities

Answer 25

‘personal trading company’- 5% sc, 5% voting rights, 5% right to dp, assets on winding up and proceeds on sale of company. MUST BE OFFICER OR EMPLOYEE
- also must have held for two years

Question 26

BADR

assets of trading business following cessation

Answer 26

qualifyig period:

2 years up to cessation and 3 years after

Question 27

BADR

what if shareholding becomes diluted?

Answer 27

can elect for badr to continue up to date of share issue = deemed to have sold all of their shares and then reaquired them on the date of the share issue for their market value, futher election to defer the gain on notional disposal until actual disposal.

Question 28

cumulative lifetime limit on badr gains?

Answer 28

1000000

Question 29

when must a claim for badr be made by?

Answer 29

12 months from 31 jan following tax year in which disposal id made- 31 jan 2023 for 20/21

Question 30

lifetime limit of investors relief?

Answer 30

10 mill

Question 31

investors rlf

what qualifies?

Answer 31

disposal of shares by individual:
must have been subscribed for as ordinary shares by the individual making the disposal
be unlisted
have been held for 3 years
must have been issues on or after 17 march 2016 and been held for a period of 3 years after 6 april 20216

Question 32

If someone has more then one residence when do they have to elect which one will be main residence for PRR?

Answer 32

2 years fom purchasing second property

Question 33

when is the deemed 9 months extended?

Answer 33

to 36 months for disabled people or those who are long term care home residents.

Question 34

letting relief is…

Answer 34

the lower of
letting gain (e.g gain after letting relief)
prr
40000