Capital gains taxation Flashcards

1
Q

What is the primary Capital Tax Legislation

A

Taxation of Chargeable Gains 1992

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2
Q

Where is the definition of market value contained for capital tax

A

Section 272 of the TCG 1992

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3
Q

What is Capital Gains Tax

A

Tax on the gain made from the disposal of an asset

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4
Q

What are the tax rates for capital gains tax

A

18-28% for residential property

10-20% for non-residential property

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5
Q

What is the taxable threshold for capital gains

A

Gains of over £12,300

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6
Q

How is capital tax calculated

A

Gain made on an asset which has been adjusted for indexation

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7
Q

What is rebasing

A

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

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8
Q

What is a permitted area

A

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.

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9
Q

What type of land does permitted area apply to

A

Applies to garden and grounds

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10
Q

What is hope value?

A

The potential value which could be achieved in the future. For example the impact that planning permission can have if granted for a site

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11
Q

What is the deemed acquisition date for CGT?

A

31st March 1982, which is the rebasing date

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12
Q

What is the difference between MV for red book valuations and MV for CGT & IHT

A

Capital tax MV does not account for the flooding of the market and also accounts for special purchasers

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13
Q

Are expenses and finance on expenses deducted from CGT?

A

Yes

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14
Q

What is fall in value relief?

A

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

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15
Q

What are some reliefs companies can receive for CGT

A

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)

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16
Q

What is private residence relief

A

Relief given for the disposal of a residential estate used as the sole residence of owners. The permitted area is exempt from CGT and encocmpasses 0.5 hectares of land and anything else deemed of appurtenance

17
Q

What happens if a loss is made on the disposal of an asset?

A

This loss would be deducted from the tax gain from that year or added onto your tax free allowance if no gain has been made