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TC > CGT reliefs > Flashcards

CGT reliefs Flashcards

1
Q

Rollover relief

A

defers payment of tax on gains on disposal of qualifying business asset whilst trade is carried on as rolled over into base cost of replacement asset

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2
Q

Rollover relief - Qualifying business assets
Land and buildings

A

Yes - if occupied and used for trade purposes

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3
Q

Rollover relief -Qualifying business assets
Fixed plant and machinery

A

Yes

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4
Q

Rollover relief - Qualifying business assets
Ships aircraft and hovercraft

A

Yes

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5
Q

Rollover relief - Qualifying business assets
Satellites, space station and space craft

A

es

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6
Q

Rollover relief - Qualifying business assets
Goodwill

A

Yes - for sole traders and partners, not for companies

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7
Q

Rollover relief - asset must be acquired in

A

1-3 years of disposal of the first asset

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8
Q

Claim for rollover relief must be made within

A

the later of four years of the end of the tax year in which the gain is realised or new asset acquired

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9
Q

Rollover relief - depreciating assets

A

Gain not rolled over by reducing cost, but deferred until crystallises on earliest of:
- disposal of replacement
- 10 years after replacement acquired
- Date replacement asset ceases to be used in trade (not on death)

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10
Q

Gift relief

A

claim may be made for gain arising on gift of business asset to be deferred until recipient disposes of asset at later date

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11
Q

Gift relief - qualifying assets
Assets used in business carried on by donor’s personal company (>5% voting rights)

A

Yes

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12
Q

Gift relief - qualifying assets
shares / securities in trading company where unquoted or donor’s personal company

A

Yes

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13
Q

Gift relief - qualifying assets
gift of shares / securities where donee is company

A

No

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14
Q

How does gift relief work

A

deemed cost of acquisition (MV at date) reduced by amount of gain that would have been chargeable, causing higher gain in future

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15
Q

Restriction on gift relief on shares in a personal company gain =

A

gain * Chargeable business assets/Chargeable assets

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16
Q

Gift relief - Any excess of actual consideration over base cost is

A

immediately chargeable, remaining gain subject to gift relief

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17
Q

BADR - Qualifying assets
All or part of trading business individual carries on alone/in parternship

A

Yes

18
Q

BADR - qualifying assets
assets of individual’s or partnership’s trading business following cessation of business

A

Yes

19
Q

BADR - qualifying assets
Shares (and securities of) individuals personal trading company (or holding company of trading group)

A

Yes

20
Q

Personal trading company criteria

A

Individual owns at least 5% share capital and exercise at least 5% of voting rights and EITHER or BOTH:
- Holding makes individual beneficially entitled to at least 5% of profits for distribution to shareholders and on winding up 5% of assets AND OR
If all ordinary shares disposed, individual beneficially entitled to at least 5% of proceeds

21
Q

BADR - Share disposal criteria - individual must be

A

officer or employee of the company, or a company within the same group

22
Q

BADR - Ownership period - asset must have been held for a period of

A

two years
if cessation - asset must have been disposed of within 3 years of cessation

23
Q

BADR - assets owned personally but used in business - disposal

A

does not qualify for releif

24
Q

BADR - Calc

A

Net gains and losses in respect of business disposal
tax at 10% after deducting loss and AE

25
Q

BADR - lifetime limit

A

£1 million for disposals on or after 11 March 2020

26
Q

BADR lifetime limit prior to 11 March 2020

A

£10 million

27
Q

Time limit for claiming BADR

A

12 months from 31 January following tax year in which qualifying disposal is made

28
Q

BADR - Election if cease to be personal company - conditions

A
  • new issue result in company ceasing to be personal company
    immediately prior to issue, if shareholder disposed all shares, BADR would have been available
29
Q

BADR - Election if cease to be personal company - if election is made

A

individual deemed to sold all shares immediately before issue, then re-acquired at market value
Further election to defer gain until actual disposal in future

30
Q

If BADR and gift relief both claimed, which first?

A

Gift relief first
then BADR

31
Q

Investors relief applies to

A

Disposals of certain qualifying shares by individuals, disposals charged at 10% regardless of cinome

32
Q

Investors relief - qualifying shares
shares must:

A
  • have been subscribed for as new ordinary shares by disposer
  • be in unlisted trading company/holding company of trading group
  • have been issued on or after 17/03/16
    Been held continually for 3y before disposal, starting from later of acquisition at 6/4/17
33
Q

Investors relief - lifetime limit

A

£10m

34
Q

Private residence relief

A

allows some or all gain of disposal of private residence to be non-chargeable to CGT

35
Q

Private residence

A

Taxpayers only/main residence, including grounds or gardens up to half a hectare or such as is required for enjoyment of house having regard to size and character

36
Q

Periods of deemed occupation are:

A

Any periods of up to 3 years of absence for ay reason
any periods where individual was required to live abroad
any period up to 4 years required to live elsewhere due to work
any period up to 24 months if prevented living there due to being built/altered/necessary steps to dispose of previous residence

37
Q

Periods of absence must be

A

proceeded by period of actual occupation and followed by occupation, but not required to resume residence if terms of employment to work elsewhere

38
Q

Can claim PRR on business use?

A

No - will get last 0 months if it was at some point used for non-business

39
Q

Letting relief

A

if property occupied as price residence is disposed of and some gain chargeable, letting relief may be available if property has been let out and there has been shared occupation

40
Q

Letting relief is the lowest of

A

letting gain
PRR
40,000

41
Q

Letting gain =

A

shared occupation / total * gain

TC (18 decks)

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