Capital Gains Tax Flashcards
who is a chargeable person?
- individuals who pay capital gains tax
- companies pay corporation tax on their gains
what assets are exempt from chargeable assets?
- cash
- motor cars
- gilt edged securities (loans issues by uk government) and qualifying corporate bonds
- National Saving Certificates/premium bonds
- prizes and betting winning
- assets held in ISAs
- certain type of chattels
- trading inventory
- receivables
what is a chargeable disposal?
- change in ownership
- eg. sale, gift, exchange, loss or destruction of asset
give some examples on not chargeable disposals
- to a charity
- on death
- between spouses or civil partners
how do we determine the date of disposal?
- when the contract is made OR
- if the contract is conditional, the date when all conditions are met
what is the difference between a chargeable gain and taxable gain?
gain stated before the annual exempt amount has been deducted
whats the annual exempt amount?
- £6000
- cant be carries forward
what are the rates for CGT?
- BRTP - 10%
- HRTP/ARTP - 20%
what are chattels?
are tangible moveable property. eg. a picture or table
what is a wasting chattel and how is it treated in terms of tax?
- expected life doesn’t exceed 50 years
- eg caravan, boat, animals, plant & machinery
- exempt from CGT
what is a non wasting chattel and how is it treated in terms of tax?
- expected life more than 50 years
- eg antiques, jewellery, paintings
- special rule applies
what is the rule if the gross proceeds and cost of non wasting chattels < £6000?
exempt
what is the rule of the gross proceeds and cost of non wasting chattels > £6000?
taxable as normal
what is the rule of the gross proceeds is <£6000 and cost is >£6000?
marginal loss is restricted: gross proceeds deemed to be £6000
what is the rule if gross proceeds is >£6000 and cost <6000?
Marginal gain is restricted to lower of
- normal gain
- 5/3 x (gross proceeds - 6000)
