Capital Gains Tax

Question 1

What is CGT

Answer 1

Payable on any profit that is made after disposal of a chargeable asset

Question 2

What are the basic rules for CGT

Answer 2

All forms of assets are potential chargeable Except cash.

If person dies this passes to the personal representative

Disposal to charity or spouse is not a disposal

Question 3

Date of disposal examples

Answer 3

Unconditional contract - date of contract

Conditional contract - date when conditions are met

Disposal of land and buildings - date when contracts are exchanged

Question 4

Who is entitled to CGT annual exempt amount

Answer 4

Adult

Minor

Uk resident
Nom Uk resident

Question 5

Basic rate of CGT for individual?

Answer 5

10%

Higher rate 20%

Question 6

Basic rate for CGT if not main residence ?

Answer 6

18% basic taxpayers

28% higher taxpayers

Question 7

Annual exemption for CGT?

Answer 7

£12300 before any gain taxable

Question 8

What assets can be excluded ?

Answer 8

Wasting assets under 50 years

Eg motor vehicles and electric equipment

Antiques such as watches and clocks always wasting assets

Question 9

What is exemption for household items ?

Answer 9

£6000 nothing charged if doesn’t exceed £6000

Question 10

Private residences for CGT purposes ?

Answer 10

Not chargeable if used as main residence or grounds up to a hectare. Exemption may be reduced if person was not living there immediately prior to disposal

Question 11

Spousal disposal ?

Answer 11

Spousal disposal exempt original value used if spouse later disposes

Question 12

Two types of relief

Answer 12

Business asset disposal relief -10% tax rate on first 1 mill

Investor relief - 10% tax rate on gains with lifetime limit 10mill on disposal of shares in unquoted company and mustn’t be an officer or employee of the company / running the company