CGT Computation

Question 1

what is the part disposal formula?

Answer 1

Cost x A/(A+B)
Where: A = value of the part disposed of
B = market value of the remainder at the time of the part disposal

Question 2

what are the rules for transfers between connected parties?

Answer 2

• have to occur at MV.
• capital losses that arise on disposal can only be offset against capital gains made from disposing of another asset to the same person.

Question 3

what is the formula for leases?

Answer 3

cost* % for duration of lease on disposal/% for duration of lease at acquisition.

Question 4

how do you determine the probate value of shares on death?

Answer 4

if acquired on death- use the lower of 1/4 up and average method
- if not acquired on death- use mid price value on stock exchange.

Question 5

what can you do with capital losses on the death of somone?

Answer 5

• can carry them back 3 tax years on a LIFO basis after the deduction of AEA. will result in a refund from HMRC.