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Tax 2 > CGT part 2 > Flashcards

CGT part 2 Flashcards

1
Q

what is a chattel

A

a tangible movable asset

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2
Q

examples of non wasting chattels

A

antiques, jewellery, paintings

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3
Q

examples of wasting chattels

A

cars
yatchs

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4
Q

is CGT charged on easting chattels

A

no

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5
Q

when is CGT charged on wasting chattels

A

when used for purpose of trade and capital allowances claimd

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6
Q

what non wasting chattels are exempt from CGT

A

where selling price is less than 2540

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7
Q

what is the case for when consideration for non wasting chattel is slightly above 2540

A

marginal relief

(consideration - 2540) * 50% = CGT payable

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8
Q

how to handle losses with non wasting chattels

A

if sp > 2540, replace selling price with 2540, restricting loss

otherwise
use full loss

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9
Q

what does ppr stand for

A

principle private residence

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10
Q

how many pprs can one person / one couple have

A

one

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11
Q

if you have more than one dwelling houses, what must you do in relation to ppr

A

nominate one to be ppr

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12
Q

what does ppr consist of

A

building plus up to once acre of land

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13
Q

what periods of ownership of ppr is ignored

A

prior to 6 april 74

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14
Q

if the home is used for trade, how is relief calcuated

A

on portion of home that is used as ppr, not trade

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15
Q

does ppr apply to development land

A

no

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16
Q

when is full relief given in relation to ppr

A

when the person lived in it full time as their home

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17
Q

if the person did not reside in it full time as their home, how is ppr relief calcuated

A

chargeable gain * (total period of occuptation/total period of ownership)

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18
Q

what are some times which are deemed as occupation

A
  1. individual worked abroad
  2. obliged to live elsewhere in ireland for work for < 4 years
  3. 12 months previous to sale

THESE ONLY APPLY IF THE PERSON OCCUPIED THE RESIDENCE BOTH BEFORE AND AFTER THESE PERIODS

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19
Q

what are the terms for a cgt exemption on transfer of site to a child

A

up to 1 acre

purpose must be to build main residence

one per child/spouse, not per parent

value of site must be no more than 500,000

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20
Q

when is clawback claimed on transfer of site to a child

A

site is sold by the child without building on it

child sells the site and house within 3 years

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21
Q

when there is a clawback for transfer of site to a child, who pays, child or parent

A

child

22
Q

does an individual renting their property while they are working abroad impact their ppr relief

A

no

23
Q

what is the reduced rate of CGT for entreprenuerial relief

A

10%

24
Q

conditions for sole traders to get entrepreneurial relief

A
  • qualifying business (not land development or land letting)
  • disposal of chargeable business assets (used in trade)
  • assets were owned for a conttinuous period of 3 years at any time prior to the disposal
  • lifetime gains since 1 Jan 2016 do not exceed 1mil
25
Q

conditions for shareholders to get entrepreneurial relief

A
  • qualifying business
  • disposal of chargeable business assets
  • own the shares for a continous period of 3 years at any time prior to the disposal
  • director/employee for 3 out of the 5 years prior to disposal (continous and greater than 50% of time working for them)
  • lifetime gains since 1 Jan 2016 < 1mil
26
Q

do you have to retire to get retirement relief

A

no

27
Q

conditions to get retirement relief

A
  • > =55
  • qualifying asset
  • owned for at least 10 years ending on date of disposal
28
Q

what are qualifying assets for retirement relief

A

chargeable business assets

shares in family trading

land/machinery in family company

land used for farming

29
Q

can a person claim both retirement relief and individual annual exemption

A

no

30
Q

what are chargeable business assets under retirement relief

A

asset used for purposes of trade.farming/office/employment

goodwill and moveable chattels

not investments, stock, cash

31
Q

what is lifetime limit for retirement relief

A

750000

32
Q

what is lifetime limit for retirement relief >66

A

500000

33
Q

is there a limit of retirement relief when disposing to a child

A

<66 = no

> 66 = 3 million

34
Q

steps to determine if retirement relief applies

A
  1. meets age requirements
  2. qualifying assets
  3. asset meets all condition
  4. portion to qualifying / non qualifying assets
  5. calc relief and CGT
35
Q

for part disposals what is the allowable cost formula

A

original cost * (sales proceed of part disposal/ (sales proceeds of part disposal + market value of remaining part))

36
Q

is the formula for part disposal allowance calculated before or after indexatio

A

before

37
Q

what is development land

A

where sales proceeds for land > current use value

38
Q

what is current use value of land

A

value of land if it was disposed of today in its current form (value of land less any hope value)

39
Q

what portion of development land is indexed

A

only current use value ie not hope value

40
Q

what is the rule for losses associated with development land

A

other losses cannot reduce gain on development land

only losses on development land can reduce gains on development land

but development land losses and be used to reduce any gain

41
Q

is enhancement expenditure indexed when disposing of development land

A

no

42
Q

how are shares treated as different assets

A

each gift, inheritance or purchase on a separate date treated as separate assets

43
Q

what rule applies when selling shares

A

FIFO

first purchased shares are deemed to be sold first

44
Q

how are rights issues and bonus issues of shares dealt with

A

merge with existing holding

treated as enhancement expenditure

45
Q

what are rights issues

A

additional shares offered to existing shareholders at a cost below their market value

46
Q

what are bonus issues

A

additional shares issues for free to existing shareholders

47
Q

how should a scrip dividend be treated

A

like a rights issue

48
Q

what does the bed and breakfast anti avoidance rule apply to

A

shares purchased and sold within 4 weeks

shares sold at a loss and repurchased within 4 weeks

49
Q

what rule applies for shares bought and sold within 4 weeks

A

LIFO

50
Q

what rule applies for shares sold at a loss and repurchased within 4 weeks

A

loss can only be used when you subsequently sell the shares that you repurchased

Tax 2 (6 decks)

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