CGT10 Chattels

Question 1

Define a wasting chattel and give its treatment for CGT

Answer 1

A wasting chattel is one with a life of 50 years or less. Such assets are exempt from CGT

Question 2

Non-wasting chattels costing and sold for under £6,000

Answer 2

Exempt

Question 3

Proceeds less than £6k but cost more than £6k

Answer 3

Loss restricted by deeming gross proceeds to be £6,000

Question 4

Proceeds over £6k cost less than £6k

Answer 4

Gain restricted to 5/3 of proceeds

Question 5

Plant and machinery?

Answer 5

are wasting assets.

Question 6

Moveable plant and machinery are

Answer 6

wasting chattels. This includes assets such as clocks and watches as these are ‘machinery’. Such assets are exempt from CGT.

Question 7

If moveable plant and machinery on which capital allowances have been or could have been claimed are sold at a loss

Answer 7

, no capital loss is available. Relief for the fall in value will
already have been given as capital allowances.

Question 8

If moveable plant and machinery is sold at a profit,

Answer 8

the capital allowances given will be clawed
back and any gain will not be exempt from CGT. The chattels rules will apply to calculate
the gain. If the asset is bought and sold for less than £6,000, the disposal is always exempt.