CGT Flashcards
What do you do with Deferred Consideration
Include it in sales proceeds
what do you do with contingent consideration
use the present market value of the right to £y in the disposal proceeds
What is the CGT Annual exempt amount and can it be carried over
- £3,000 in 24/25
- Cannot carry forward
CGT Reliefs (7)
Private Residence Relief
Spousal relief
Business Asset Disposal Relief
Investors Relief
Holdover Relief
Business Rollover Relief
Reinvestment Relief
sale of house you used to live in but haven’t for a while
-Sales proceeds reduced by the proportion of the time you lived in the house (months)
- e.g months lived in / Total months of ownership
- If you lived in the house the last 9 months always allowable
What costs are deducted from sales proceeds?
- Costs of Purchase
- Costs of sale
- Costs of enhancing value
Can you carry forward CGT losses
Yes, indefinitely
- Must be claimed in first 4 years
Explain Business Asset Disposal Relief (previously entrepreneurs relief)
- First £1 million of qualifying gains
- Taxed at 10%
- Assets must have been owned for 2+ years
- Disposal of all/part of business run as sole trader
OR - shares in trading company if 5% shareholding and is employee/director
Explain Investors Relief
- First £10 million of qualifying gains
- Taxed at 10%
- must be newly issues shares
- Post March 2016
- Must be held 3+ years
- not employee or director
Explain Holdover Relief
- On a Gift of asset
- Disposed asset must cause immediate IHT charge and be trading asset
- Reduces base cost for new acquirer
- donee and donor have to make joint claim
- cant be to settlor interest trust
Explain Business Rollover Relief
- if sell assets used in business to buy new assets for use in business
- Defers gain till disposal of new asset
Explain Reinvestment Relief
- Any gain deferred by purchasing EIS shares
- Purchasing SEIS = 50% of gain reinvested is exempt
How and when is CGT payable
- Normally via self assessment
- Paid by Jan 31 of year following disposal
- Residential Property - 60 days after completion by making online property report
Are trustees liable to CGT?
bare
vuln. ben.
iip
A+M
Disc
- Bare Trust - No, the beneficiary is
- Vulnerable beneficiaries - same relief as Income Tax
- IIP Trust - If 1 trustee is UK resident - yes at trust rates (20/24%)
- Accumulation and Maintenance Trust - When beneficiary becomes entitled to assets there will be CGT charge (maybe holdover relief)
- Disc Trusts. - yes at trust rates (20/24%)
How much is the trust CGT rate
20% or 24% for residential property
