CGT Flashcards
Capital gains from foreign income?
Check the remittance basis!
Transferring (e.g. shares) to husband?
“NO GAIN NO LOSS
Also for IHT, SPOUSE EXEMPTION”
What happens if someone makes a big (BADR) gain?
“BADR has a (one million pound) UPPER LIMIT
Big gain? -> ONE MILLION AT BADR 10% THE REST AT USUAL 20%”
CGT gain from connected person treatment?
PROCEEDS = MV (cost = cost aha)
Do you still get gift relief or BADR on GOODWILL?
Nothing different with goodwill aha still get gift relief/badr
What to remember with gift relief?
Gift amount UNDER MV can be deferred
Gift relief to connected person?
“Have to start with MV not actual cost, then reduce by GR
Don’t forget that if you give something (to a connected person) at an undervalue, then JUST THE benefit compared to market value (i.e. MV minus amount paid) qualifies for gift relief”
Is a share buyback capital?
What else can you mention with share buybacks?
“AUTOMATICALLY CAPITAL unless breached (for an individual)
Company pays STAMP DUTY (0.5%) on buying the shares!”
How could you estimate the shares MV?
“Unconnected person offered an amount for them
But if that is for controlling shareholding, could ‘get more evidence’ for a lower value for a much reduced % shareholding”
When does a close company loan to a participator become chargeable?
If loan outstanding 9m1d after year end (part of instalments if known)
Sale and purchase? What to not forget? What to look out for?
“Don’t forget it is a sale so the GAIN is TAXABLE (@ CT rates for company)
Look out for rollover relief! (And maybe holdover)”
Purchase of a NEW BUILDING/FACTORY?
-> SBA (3% (Time apportioned for acc period))
Gift relief terminology
‘Deemed cost’, ‘joint signed election’, made 4y after tax year
Is capital loss relief restricted?
“YES
This is restricted to the gain in the year LESS AVAILABLE B/F CAPITAL LOSSES
I.e. feels like they only allow you to relieve the whole gain if you sacrifice your b/f/ losses
BUT doesn’t take into account PA aha”
Capital implications of liquidation?
You loose shares (and MIGHT get something back from it) – so that cost is a capital loss (unless get more back from liquidators I suppose) (Capital loss relief)
