Chapter 14 - CGT Reliefs Flashcards
What are the 5 types of relief available on capital gains tax for individuals?
1) Rollover relief
2) Principal private residence relief
3) Gilt Holdover relief
4) Business assets disposals relief
5) Investors’ relief
What is the one relief on capital gains tax available to a Company?
1) Rollover relief
What are the steps to approach a Capital Gains tax relief question
1) Calculate gain on disposal of assets
2) Consider relief to reduce or eliminate gain
3) Deduct current year losses
4) Apply AEA and any losses brought forward (AEA against, first, Residential property gains, second, NON BADR, third, BADR
5) Calculate CGT
What is the formula to calculate exempt relief on part occupation of main residence?
Gain * (period of occupation/total period of occupation)
What criteria does an owner of a property have to meet in order to qualify for Letting Relief?
1) The owner lets out part of their property to tenants
2) The owner is in shared occupancy with the tenants
How to calculate letting relief?
It is the lowest of:
1) Amount of non exempt gain attributable to the letting
2) Gain exempt under the PPR Rules
3) £40,000
If the property is part let, how many months in year of sale are deemed fully occupied by owner?
9 months
What the three conditions that must be met for a disposal of an asset to qualify for rollover relief?
1) Old and new assets must be used in trade
2) Does not have to be the same trade
3) New asset much be purchased in the 4 year window running from 12 month before and 36 months after the sale of the aset
What are 5 examples of assets that qualify for rollover relief?
1) Land and buildings
2) Goodwill
3) Satellites, space stations and spacecraft
4) Fixed plant and machinery
5) Ships, aircraft and hovercraft
What are the time limits on roll over relif claims?
1) 4 years after the end of the tax year of acquisition of new asset, and
2) 4 years after the end of the tax year of disposal of old asset
What are three examples of assets that qualify for gift holdover relief?
1) Assets used in business, no minimum period of ownership
2) Shares in unlisted (including AIM) trading company
3) Shares in quoted company if the donor owns at least 5% of the voting rights
What are the features of the relief for gift holdover relief?
1) Assets deemed sold at MV
2) Gain is deducted from MV of asset transferred, arriving at base cost for donee
3) Joint election required within 4 years of tax year
How are shares restricted in gift holder over relief?
Gain * (chargeable business assets / chargeable assets)
