Ch14: Chattels and Private Residence Relief Flashcards
(1) Chattels (2) Wasting Assets (other than Chattels) (3) PRR
Define Chattels.
Tangible moving assets.
What is the difference between:
(1) Wasting Assets and
(2) Non-Wasting Chattels?
Wasting Assets =
Estimated remaining useful life of < 50 years.
Non-Wasting Chattels =
- Expected life from date of disposal is 50+ years.
Non-Wasting Chattels are chargeable to CGT in the normal way, subject to the following exceptions. How would you calculate it?
(1) Cost = <£6,000 and Proceeds = <£6,000
(1) Cost = <£6,000 and Proceeds = <£6,000
Wholly EXEMPT.
Non-Wasting Chattels are chargeable to CGT in the normal way, subject to the following exceptions. How would you calculate it?
(2) Cost = <£6,000 and Proceeds = >£6,000
(2) Cost = <£6,000 and Proceeds = >£6,000
Do 2 computations and use the LOWER value:
(a) [ 5/3 * (Gross Proceeds - £6,000) ]
(b) [ Sales Proceeds - Actual Cost ]
Non-Wasting Chattels are chargeable to CGT in the normal way, subject to the following exceptions. How would you calculate it?
(3) Cost = >£6,000 and Proceeds = <£6,000
(3) Cost = >£6,000 and Proceeds = <£6,000
Gross Proceeds will ALWAYS be £6,000 (so you won’t use the actual cost when calculating it.
[ £6,000 - Actual Cost ]
Non-Wasting Chattels are chargeable to CGT in the normal way, subject to the following exceptions. How would you calculate it?
(4) Cost = >£6,000 and Proceeds = >£6,000
(4) Cost = >£6,000 and Proceeds = >£6,000
Normal Disposal
Formula to calculate Private Residence Relief
PRR = Gain * (Period of Occupation / Period of Ownership)
Gains that are not covered by PRR and the Letting Relief are taxed at…
18% or 28% depending on if the taxpayer has any unused BRB left, AEA and Capital Losses.
Do you include the ‘LAST 9 MONTHS’ in your computation for deemed occupation?
Is it chargeable or exempt?
Yes, and it is exempt.
‘Working abroad due to employment’ counts as deemed occupation, but are they required to return to the property to make it exempt?
No, if they are abroad due to employment then it is deemed as occupied (so EXEMPT) and they are not required to return to the property.
How many years is exempt and is deemed as occupied if they are ‘working away from home because of employment’?
Do they need to return to the property after?
Total of 4 years.
No, they don’t need to return to the property.
How many years is exempt and is deemed as occupied ‘for any other reason’?
Do they need to return to the property after?
Maximum of 3 years.
Yes, they do need to return to the property after.
