Capital gains taxation Flashcards
What is the primary Capital Tax Legislation
Taxation of Chargeable Gains 1992
Where is the definition of market value contained for capital tax
Section 272 of the TCG 1992
What is Capital Gains Tax
Tax on the gain made from the disposal of an asset
What are the tax rates for capital gains tax
18-28% for residential property
10-20% for non-residential property
What is the taxable threshold for capital gains
Gains of over £12,300
How is capital tax calculated
Gain made on an asset which has been adjusted for indexation
What is rebasing
In capital taxation it is assumed any asset held at 31 March 1982 has been sold and immediately reacquired at its market value on that date. The effect is that any gain are attributed to that period since then
What is a permitted area
An area falling under private residence relief for capital gains tax purposes. This area is under 0.5 hectares with anything over having to be of appurtenance to the reasonable enjoyment of the property and within the same curtilage.
What type of land does permitted area apply to
Applies to garden and grounds
What is hope value?
The potential value which could be achieved in the future. For example the impact that planning permission can have if granted for a site
What is the deemed acquisition date for CGT?
31st March 1982, which is the rebasing date
What is the difference between MV for red book valuations and MV for CGT & IHT
Capital tax MV does not account for the flooding of the market and also accounts for special purchasers
Are expenses and finance on expenses deducted from CGT?
Yes
What is fall in value relief?
Value of gifted property has fallen in value since the date of transfer. The amount the asset has fallen will be added onto your capital gain allowance
What are some reliefs companies can receive for CGT
Entrepreneurs’ Relief (sole traders or business partners)
Rollover Relief (buy a new asset 3 years after disposal of old)
Hold-Over Relief (you used the business asset for trading as a sole trader)
Incorporation Relief (transfer all your business assets in exchange for shares in a company)