CH11 Valuation, Connected Persons and Inter-Spouse Transfers

Question 1

Valuation

Quoted shares are valued at ?

The market value of an asset may need to be established for CGT purposes.

Answer 1

the average of the bid and offer prices.

Question 2

Valuation

Unit trust units are valued at ?

The market value of an asset may need to be established for CGT purposes.

Answer 2

the bid price.

Question 3

Connected Persons

Connected persons include: ?

Answer 3

• Spouses,
• Relatives (lineal),
• A company you control,
• The trustees of a trust you set up, and
• Your fellow business partners (and their relatives)

Question 4

Connected Persons

The proceeds used for calculating gains or losses on disposals to connected persons must be ?

Answer 4

market value.

Any actual proceeds are actually ignored.

Question 5

Connected Persons

Losses on disposals to connected persons can only be used against ?

Answer 5

future gains on disposals to that same person.

Question 6

Inter-Spouse Transfers

Assets are transferred between spouses at ?

Answer 6

no gain, no loss.

Deemed proceeds for donor spouse = cost = deemed cost for donee spouse.

Question 7

Inter-Spouse Transfers

This rule applies until ?

Answer 7

Three years from the end of the tax year of seperation or the date of divorce (whichever is earlier).

Transfers made as part of a divorce settlement take place at no gain / no loss.

Question 8

Inter-spouse Transfers

CGT planning may involve making inter-spouse transfers prior to disposals to ensure that both spouses make use of their ?

Answer 8

annual exempt amounts, brough forward losses are used efficiently and gains are charged at the lowest rate.

Question 9

Series of Transactions

If an asset is disposed of by an individual in a ?

Answer 9

series of transactions with a connected person(s) within six years of one another, the gains must be calculated using an appropriate proportion of the aggregate market value.