Chargeable Gains for Companies (3)

Question 1

When a company disposes of a part but not all of an asset?

Answer 1

Allowable cost of the part of the asset disposed of is computed as (Proceeds/(Proceeds + Value remaining))

Question 2

A chattel disposal and a non-chattel wasting asset disposal treatment?

Answer 2

Same as for an individual but with indexation allowance available on the allowable cost

Question 3

If an asset is damaged and compensation or insurance money is received as a result?

Answer 3

This will normally be treated as a part disposal of the asset

Question 4

If insurance money is not used in restoring the asset?

Answer 4

A normal part disposal arises

Question 5

If insurance money is used to fully restore an asset?

Answer 5

Any gain is deferred when the iinsurance proceeds are received

Question 6

If an asset is destroyed or lost and no compensation or insurance money is received?

Answer 6

Results in a capital loss

Question 7

If the insurance money is used to buy a replacement asset within 12 months?

Answer 7

Gain can be deferred until the new asset is sold

Question 8

If only part of the insurance money is used to buy a replacement asset?

Answer 8

Some of the gain is taxed immediately and some of the gain will be deferred

Question 9

Unindexed gain?

Answer 9

Deducted from proceeds to get the chargeable gain

Question 10

When there’s a bonus issue?

Answer 10

No need to index

Question 11

When is there no chargeable gain?

Answer 11

When company elects to rollover the proceeds against the asset

Question 12

What is first done when a limited company has a capital loss?

Answer 12

First set off against any chargeable gains arising in same accounting period

Question 13

What is done with capital losses brought forward?

Answer 13

Deducted from current year chargeable gains

Question 14

When something isn’t enhancement expenditure (repairs)?

Answer 14

Can’t be deducted to get the unindexed gain