Capital gains tax - individuals Flashcards
What are chargeable disposals in terms of CGT?
- sale or gift of whole or part of an asset
- loss or destruction of an asset
What are exempt from CGT?
- gifts to charity
- disposals on death
- disposals between spouses
When is the date of disposal recognisable under CGT?
- when an unconditional contract is made, or
- when the conditions are met
What asset are exempt from CGT?
- cars (including vintage)
- cash
- prize/bet winnings
- NISAs
- wasting chattels
- non-wasting chattels =<6000
Who are chargeable persons?
- individuals
- partners in partnership
How do you calculate single asset gain/loss for individuals?
Proceeds
Less: cost of sale
Less: allowable expenditure (acquisition cost, incidental cost of acquisition, enhancement expenditure)
How do you calculate CGT?
Asset 1 + Asset 2 - Annual exempt amount (11,100)
What are that tax rates on taxable gains?
18% within basic rate band and 28% in excess AFTER calculating tax on income
How do you calculate the gain on a non-wasting chattel that cost and was sold for less than £6000?
You don’t as it is exempt
How do you calculate the gain on a non-wasting chattel that cost less than £6000 and was sold for more than £6000?
- do the normal procedure, and
- 5/3 * (gross proceeds - 6000)
pick the lower of the two
How do you calculate the gain on a non-wasting chattel that cost more than £6000 and was sold for less than £6000?
Assume the proceeds for the CGT calc are £6000
How do you calculate the gain on a non-wasting chattel that cost more than £6000 and was sold for more than £6000?
Proceed the CGT calc as normal
Do shares count as chattels?
No
Is a disposal to an art gallery exempt?
Yes
When an asset is sold by an individual, will indexation allowance will reduce the chargeable gain? Explain
No, indexation allowance is only available to corporations, not individuals
