CGT

Question 1

What can you do with losses made in the current tax year?

Answer 1

A loss must deducted from gains in the same tax year.

The tax free allowance is deducted after the loss in the same tax yearand if gain is still above allowance unused losses from previous years can be used.

Any remaining losses can be used in a future tax year.

Only registered carried forward losses can offset future gains

You have 4 years to claim a loss after the end of the tax year the asset was disposed of.

The loss can be applied to the highest taxed asset first ie property If applicable

Question 2

What are the CGT calculation Steps?

Answer 2

Disposal Proceeds
Less acquisition
Less costs
Less losses
Apply exemption
Apply tax rates

Question 3

CGT exemption in 2024/2025

Answer 3

£3,000

Question 4

Explain CGT consequences of irrevocable designation and revocable designation using a GIA

Answer 4

Irrevocable - by setting up Collective investment the investor creates an absolute trust in terms of CGT the beneficiaries are liable to gains and have their full annual exemption to use. This applies even if parents set up account

If a revocable account is set up no trust is created as no gift has been made so all tax including CGT remains with the investor