Chapter 15 - Chattels

Question 1

Introduction

Answer 1

A chattel is tangible, movable property. Examples are paintings, antiques, racehorses and computers. If it can be seen, touched AND moved, it is a chattel

Question 2

Wasting Chattels

Answer 2

Chattel with a predicted useful life of 50 years or less. Wasting chattels are EXEMPT assets for CGT purposes

Question 3

Wasting Chattels Exception

Answer 3

The one instance where wasting chattels are subject to CGT is if they are used in a trade and capital allowances have, or could have, been claimed on them

Question 4

Non-Wasting Chattels: £6,000 Rule

Answer 4

If a non-wasting chattel is sold and proceeds of the sale are less than £6,000, the sale is exempt from CGT

Question 5

Non Wasting Chattels: Loss with Proceeds

Answer 5

If a taxpayer makes a capital loss on an item with proceeds less than £6,000, we pretend the gross disposal proceeds are £6,000. It cannot create a gain

Question 6

Non Wasting Chattels: 5/3rds Rule

Answer 6

If disposal proceeds exceed £6,000 but acquisition is less than £6,000, calculate the gain the normal way and then calculate it using:
5/3 x (gross proceeds - £6,000)
The lower of the calculations is the gain we use

Question 7

Plant and Machinery

Answer 7

Where a taxpayer makes a gain on a wasting asset that did or could’ve claimed CAs, it is chargeable to CGT. If a loss is made, the loss will no be allowable