Chapter 16 Connected Persons and Inter-spouse transfers

Question 1

connected persons

Answer 1

Connected persons – a taxpayer is connected to their spouse, relatives (parents, grandparents, children, siblings). A taxpayer is also connected to the relatives of their spouse. An individual is connected to a company if they have the power to exercise more than 50% of the voting rights. A partner is connected with his fellow business partners and their relatives.
Transactions with connected persons – all transactions with a connected person take place at market value for CGT purposes. The only exception is with spouses, which is gone at no gain no loss.
Losses on disposals to connected persons – where a disposal to a connected person gives rise to a loss, that loss may only be used against gains on future disposals to the same connected person. The future disposal can be in the same tax year or a later tax year.