Chapter 9: Chattels and private residence

Question 1

Chattles definition

Answer 1

Defined as tangible moving property

Some chattles are exempt from capital gains tax - for example cars, wasting chattles and those that are sold for less than £6000

Question 2

Wasting Chattles

Answer 2

Life under under 50 years

Examples:
Greyhounds
Racehorses

Question 3

Non-wasting chattles

Answer 3

Life over 50 years

Examples:
Paintings
Antiques
Jewellery

Question 4

Disposal of non-wasting chattles:

Sold and purchased for under £6000

Answer 4

EXEMPT

Question 5

Disposal of non-wasting chattles:

Sold for less than £6000
Purchased for more than £6000

Answer 5

Restrict the loss:

Take gross proceeds as £6000

Question 6

Disposal of non-wasting chattles:

Sold for more than £6000
Purchased for less than £6000

Answer 6

Lower of:

-normal gain

-5/3 x (gross sale proceeds - £6000)

Question 7

Disposal of non-wasting chattles:

Sold more than £6000
purchased for more than £6000

Answer 7

normal capital gains tax disposal

Question 8

Principle Private residences for full period of ownership

Answer 8

EXEMPT

Question 9

Never occupied principle private residence

Answer 9

Fully chargeable to CGT

Question 10

Occupied for part of period of ownership

Answer 10

Calculate full gain and deduct PPR relief

Question 11

PPR relief

Answer 11

(period of occupation) / total period of ownership) * gain

Question 12

Periods that are always considered to be Deemed occupation

Answer 12

-last 9 months, provided the property was the taxpayers PPR at some point

-

Question 13

periods considered to be deemed occupation provided they are preceded and followed by ACTUAL occupation (4 rules)

Answer 13

-any period OVERSEAS due to employment reasons

-Any periods (up to 4 years) when the taxpayer was required to work elsewhere in the UK

-Any periods (up to 4 years) where the taxpayer was self-employed and had to work away from home either in UK or overseas

-any periods for WHATEVER reason not exceeding 3 years total

Question 14

Tax planning

Answer 14

carefully check and if possible - plan periods of absence from the property to try ensure that deemed residency will apply

all periods of absence are proceeded and followed by actual occupation

Make use of the last 9 months deemed residency by selling the property within 9 months of leaving the property

Question 15

Private residences - Tax brackets

Answer 15

Basic rate / lower rate : 18%

Higher rate = 28%