Chargeable Gains for Individuals

Question 1

When is there a chargeable gain

Answer 1

Gains are made by making a single DISPOSAL of a capital item and making a PROFIT on the sale

Question 2

when does capital gains tax liability occur?

Answer 2

When:
- an asset is sold
- an asset is given away as a gift
- you swap the asset for something else
- you get compensation for it, such as getting an insurance pay-out if it lost or destroyed

Question 3

When is the date of the transaction?

Answer 3

The date of the contract and if it is conditional the date is when it becomes unconditional.

Question 4

What are examples of exempt disposals for CGT (Not the assets)?

Answer 4

• When somebody inherits an asset (This is taxed under inheritance tax instead)
  Where the inheritor sells the asset the cost price used to calculate CGT will be the market value of the asset
  at the time of death
• Gifts to charities don’t give rise to a CGT
• Husbands, Wives, or civil partners, may transfer the ownership of assets as a no gain. This is because it stays within the relation so its a zero gain and zero loss.

Question 5

What are examples of exempt disposals for CGT (Assets)?

Answer 5

• Cars
• Personal Possessions where they are bought and sold for less that £6,000
• someones main home
• gains from a ISA’s
• personal possessions with a lifespan of less than 50 years
• GILTS
• Premium bonds, betting

Question 6

What is the annual exempt amount?

Answer 6

£12,300

Question 7

What does Chattel mean?

Answer 7

an item of tangible, moveable property.