CGT

Question 1

For a capital gains tax liability to arise, what must happen?

Answer 1

a chargeable person must make a chargeable disposal, typically a sale of a chargeable asset but there may be other situations in which a disposal occurs.

Question 2

2 chargeable persons

Answer 2

-individuals (uk resident, includes all disposals regardless of location. Non-UK not examinable)
-companies (pay corporation tax rather than capital gains tax)

Question 3

chargeable disposal

Answer 3

chargeable person gives up/transfers ownership of a chargeable asset

Typically sold or gifted, whole or part of an asset
Loss or destruction of an asset
Exchange of an asset

Question 4

What do chargeable disposals not include?

Answer 4

Death - subject to will
Gift to charities

Question 5

chargeable asset

Answer 5

All assets are chargeable assets unless they fall under exemption

Question 6

list of exempt assets (11)

Answer 6

cash
exchange gains/losses of foreign currency
main residence
cars
gilt edged securities and qualifying corporate bonds
NS&I certificates/premium bonds
prizes/betting winnings
ISAs
trading inventory
receivables
certain types of chattels

Question 7

what is a gilt?

Answer 7

gov’t issued loan

Question 8

what’s a corporate bond?

Answer 8

debenture or more specifically a loan note

Question 9

what is a chattel?

Answer 9

tangible movable property - free standing