CGT

Question 1

Select which of the following disposals is a chargeable disposal for capital gains tax purposes.

a) Bequest of a house in the will of a mother to her daughter.

b) Gift to a friend of £12,000 in National Savings Certificates.

c) Gift to a friend of a painting worth £1,000,000.

d) Gift of a painting to a charity when the painting was worth £300,000.

Answer 1

c) Gift to a friend of a painting worth £1,000,000.

Gifts on death are not chargeable disposals.

National Savings Certificates are an exempt asset. As it is not a chargeable asset, there cannot be a chargeable disposal.

A gift of any capital asset to a charity is not a chargeable disposal.

Question 2

What is classes as the disposal date of an asset for Capital Gains purposes?

a) Date contract is made

b) Date asset changes hands

Answer 2

a

Question 3

What would you need to take the annual exemption from in order to calculate CGT liability?

a) taxable gains

b) chargeable gains

Answer 3

b

taxable gains have already accounted for annual exemption

Question 4

What is a wasting chattel?

Answer 4

Tangible moveable property with life less than or equal to 50 years

Exempt from CGT

Question 5

What is a non wasting chattel?

Answer 5

Tangible moveable property with life more than 50 years

Question 6

When would wasting chattel be treated as non-wasting chattel?

Answer 6

When calculating CGT if capital allowances were claimed on its purchase

Question 7

What is the annual exempt amount for CGT?

Answer 7

£12,300