CGT 11 Valuation, Connected Persons and Inter-Spouse Transfers Flashcards
Quoted shares are valued at……
Quoted shares are valued at the average of the bid and offer prices.
Unit trust units are valued at …
the bid price.
The value of unquoted shares …
must be negotiated with HMRC.
If assets are owned jointly….
there is a deduction for non-marketability (10% is acceptable for examination purposes).
Connected persons include:
- spouse (includes civil partner)
- relatives (ancestors, descendants, brothers and sisters)
- relatives of your spouse
- spouses of your relatives
- a company you control
- your fellow business partners and their relatives
The proceeds used for calculating gains or losses on disposals to connected persons …
must be market value, actual proceeds are ignored
Losses on disposals to connected persons …
can only be used against future gains on disposals to that same person.
Assets are transferred between spouses …
at no gain, no loss. Deemed proceeds for donor spouse = Cost = Deemed cost for donee spouse. This rule applies until the end of the tax year of separation
Married couples remain connected until….
the decree absolute (for married couples) or the date of dissolution (for civil partners); therefore, until divorce/dissolution, transfers take place at market value.
CGT planning may ….
involve making inter-spouse transfers prior to disposals to ensure that both spouses make use of their annual exempt amounts, brought forward losses are used
efficiently and gains are charged at the lowest rate.
If an asset is disposed of by an individual in a series of transactions with a connected person or a number of connected persons within ______ years of one another, the gains must be calculated using an appropriate proportion of the aggregated market value.
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If assets from a set are sold individually in a series of disposals to the same person or connected persons….
the disposals are all treated as one transaction so the 5/3 chattels rule is applied to the aggregated sale proceeds.
