CGT

Question 1

capital gain exemptions (donees)

Answer 1

• registered charities
• friendly societies
• local authorities
• registered pension schemes
• investment trusts
• approved scientific research associations

Question 2

what are quoted shares valued at?

Answer 2

• the half up rule
• lowest quoted price + 0.5(higher quoted price - lower quoted price)

Question 3

exempt chargeable assets

Answer 3

• cash
• motor cars
• wasting chattels
• ISA shares and investments
• qualifying corporate bonds
• NS&I Certificates and Premium Bonds

Question 4

how does rollover relief work?

Answer 4

gain taxed now = proceeds of old asset - cost of new asset
rollover relief will be the balancing figure #
adjust for business use and ensure its within 4 years

Question 5

what are brought forward capital losses set against?

Answer 5

set against the taxable gains amount for the year

Question 6

when are indexation allowances available?

Answer 6

• only available to companies up to December 2017
• allowance calculated as RD - RI/RI * cost and taken away from the chargeable gain

Question 7

how does the remittance basis work?

Answer 7

• if claimed, the annual exemption no longer applies

Question 8

what is gift relief? (CGT)

Answer 8

• the gain on disposal of a business asset is passed from the donor to the donee
• donee’s cost of acquisition (MV) is reduced by the gain to the donor

Question 9

what are the qualifying business assets for gift relief?

Answer 9

• assets used in a business carried on by the donor
• shares in an unquoted company
• shares in the donor’s personal company

Question 10

how is the gift relief on shares restricted?

Answer 10

• restricted if the gifted shares are the donor’s personal company at any time 12 months prior to disposal
• gain calculated as:

gain x chargeable business assets/chargeable assets

Question 11

what is business asset disposal relief? (BADR)

Answer 11

• disposal of qualifying assets is charged ar 10%
• assets must have been owned for at least 2 years

Question 12

what are the qualifying assets for BADR?

Answer 12

• all/part of a trading business owned by the individual
• assets of individual’s business on cessation
• shares in an individual’s personal trading company (>5% ownership) that they have worked at

Question 13

what is investors relief?

Answer 13

• gains on qualifying shares are taxed at 10%
• the shares are ordinary shares of an unlisted trading company issued after March 2016 and have been held for at least 3 years.

Question 14

when does an individual need to choose which property will be regarded as their private residence?

Answer 14

• within two years of acquiring the second property

Question 15

what are the rules of ‘deemed occupation,?

Answer 15

• an individual can live elsewhere for up to 3 years for any reason
• compulsory employment abroad
• up to 4 years for work reasons