Capital Taxation Flashcards
How does council tax work?
Each property is valued and placed in one of eight council tax bands by the Valuation Office Agency.
Under what circumstance may Capital Gains Tax be applied?
CGT is a tax paid on the profit when you sell (or dispoise of somthing (an asset) that has increase in value.
What is the defentiaion of Market Value under the Taxation of Chargable Gains Act 1992?
The price an asset might reasonably expect to fetch on a sale in the open market at the valaution date. No reduction shall be made on the assumption that the whole property is placed on the market at one and the same time. - relfects a bid from a special purchaser.
What rules apply if a client sells their home/live abroad/are a company registered abroad?
COME BACK TO THIS.
When is CGT not paid?
you dont need to pay if your capital tax allowance is larger than your taxable gain.
Is CGT payable on gifts?
1) you do not pay CGT on gifts to spouse unless;
- you separated and did not live together at all that tax year.
- you gave them goods for thier business to sell on.
2) You do not pay CGT on an asset given to charity unless,
- you sell it for more than your paid for it.
- you sell it for less than market value.
What tax reliefs are there for CGT?
1) Business asset disposal relief - pay 10% on qualify profits if you sell all or some of your business.
2)Business asset rollover relief - Delay paying when you sell or dispose of some types of assets if you replace them.
3) Incorporation Relief - Delay paying when you transfer your business to a company.
4) Gift Hold-over relief - Pay no CGT if you give away business asset - the person you give it to pays tax when they sell.
How is CGT calculated?
The difference between what you paid for your property and the amount you got when you sold (or ‘disposed of’) it.
Is CGT paid on property owned and sold by a limited company?
No - Corporation tax would be paid on the assets sold.
What is the defenition of market value under IHT Act 1984
The price an asset might reasonably expect to fetch on a sale in the open market at the valaution date. No reduction shall be made on the assumption that the whole property is placed on the market at one and the same time. - relfects a bid from a special purchaser.
When is IHT payable?
If the value of a persons estate is over the price of £325,000. Can increase to £500,000 if passed to a spouce of children.
When is IHT not payable?
Everything over £325,000 is left to a spouse or charity. or the value is below £325,000.
What is Probate?
The legal right to deal with somones’s property, money and posessions.
