CGT

Question 1

CGT Exemptions

Answer 1

Gilts
Intra-Spouse
Death
PPR
Charitable
ISA
VCT
Chattels

Question 2

Five Steps of CGT Calculation

Answer 2

1. Is is a CGT diposal
2. Calculate Gain
3. Net Gain (Current Year losses then use Annual Exemption then use and carried forward losses
4. Reliefs (Entrepreneurs’, Business Rollover, Reinvestment)
5. CGT Bill

Question 3

Entrepreneurs Relief

Answer 3

• Applies to individuals or trustees who dispose of the whole or part of a business or shares in a trading company in which they have a qualifying interest
• Must have had an interest for at least 2 years
• First £10m of lifetime gains chargeable to CGT at a rate of 10%
• Gains in excess of £10m charges at 10% / 20%
• Still uses up BRB in calc

Question 4

Reinvestment into EIS

Answer 4

Relief is available subject to the following:

• EIS investment made in the 12 months prior and period ending 3 years after the disposal subject to CGT
• Gain is deferred until disposal of EIS shares
• Unlimited amount

Question 5

Reinvestment into SEIS

Answer 5

• Must invest in the same Tax year as the disposal subject to CGT
• 50% of gain is then exempt to CGT
• 50% of gain treated in the same way
• No deferral of CGT like with EIS previously

Question 6

Exempt Investments

Answer 6

Gilts / Corporate Bonds / ISAs

Question 7

CGT Summary

Answer 7

1. Check disposal is a CGT disposal
2. Qualifying Gains (ER) then Non Qualifying (Res & Non Res Property)
3. Current tax year losses must be offset against current gains
4. Carry forward losses indefinite if registered within 4 years of end of tax year gain made
5. Use losses and annual exemption to CGT
6. Add taxable gain to taxable income
7. Tax due 31st Jan following tax year end

Question 8

Products in Battle Against CGT

Answer 8

ISA / JISA (exempt)
Pension Contributions (exempt)
Investment Bonds (exempt)
VCT (exempt)
EIS / SEIS (Exempt > 3 years)
EIS / SEIS reinvestment relief