Chapter 14: CGT Reliefs Flashcards
Principle private residence relief
Part occupation
Gain x (Period of occupation / total period of ownership)
Deemed occupation for PPR relief
4 things
- Last 9 months of ownership - must have lived in the house at some point in the past
- Up to 3 years for any reason - must have lived in the house BEFORE and AFTER absence
- Up to 4 years when the employee required to work elsewhere in the UK - must have occupied the house at some point before but do not need to re-occupy after if work prevents it
- Any period when the employee required to work abroad - occupied house before but do not need to re-occupy after if work prevents it
Other points regarding PPR relif
-owns more than one property
-job-related accomm
-married couples
-Owns more than one property
must elect for one to be his main residence
elect within two years of commencing occupation of the second property
-Job related accom
Can deem any other property to be main residence
-Married couples
can only have one main residence between them
Letting relief is available in addition to PPR relief if :
Owner lets out part of their property to tenants AND
the owner is in shared occupancy with the tenants
Letting relief is not available where the whole property is let
Letting relief is the lowest of:
The amount of non exempt gain attributable to the letting
Gain exempt under the PPR relief
40,000
Letting relief last 9 month rule
If the property is part let, the last 9 months is deemed to be fully occupied by the owner if he has lived in the property exclusively at some point
If the property has always been let, the 9 month rule does not apply
Rollover relief
available to who
qualifying asset
qualifying period
Available to individuals and companies
Must be used in trade, does not have to be in the same trade
New asset must be purchased either 12 months before or 36 months after
How rollover relief works
If any sale proceeds are retained, your immediate chargeable gain is the lower of:
-The actual gain on the sale of old asset
-The cash retained after reinvestment
the gain on the sale of the old asset is rolled into the cost of the new asset
what is a Depreciating assets
depreciating assets include all plant and machinery and
expected life under 60 years
Depreciating assets - The gain on the sale of the 1st asset is deferred until the crystallising event
The crystallising event is the earliest of:
The sale of the replacement asset
10 years from acquisition of replacement assets
Date on which replacement asset is no longer in trade
Time limit for rollover relief to make a claim
4 years after the end of the tax year (accounting period) of the ACQUISTION OF THE NEW ASSET
4 years after the end of the tax year (accounting period) of DISPOSAL of the old asset
What qualifies for ROR
Only fixed (i.e. not movable) plant and machinery qualifies for rollover relief.
Shares are not qualifying assets.
Assets must be used for trading purposes to qualify for rollover relief.
Goodwill disposed of by a sole trader (not a company) qualifies for rollover relief.
If the actual gain is lower than the amount not invested, is there rollover relief available
No
Gift relief - qualifying assets
Used in business
shares in unlisted trading companies, no min %
shares in quoted trading companies, minimum 5% voting rights
Gift relief - the relief
Assets deemed at MV
MV - gain = new base cost
joint election within 4 years of the tax year which the transfer takes place
