Corporate Gains Reliefs - Business Flashcards
What are the 4 CGT reliefs for individuals?
Business asset disposal
Investors relief
Roll-over relief
Hold-over relief
What is the effect of business asset disposal relief?
It reduces the CGT rate from 20% to 10% on qualifying disposals
At what point in the CGT calculation is business asset disposal relief applied?
From the taxable chargeable gain point
What 4 disposals qualify for business asset disposal relief?
All/part of trading business
Assets in a business that used to trade
Shares in a trading company
Shares in a company that used to trade
What conditions must be met to qualify for BAD (business asset disposal) for disposing of all/part of a business?
Is a trading business
Been owned for at least 2 years
What conditions must be met to qualify for BAD for disposing of assets in a business that used to trade?
Must have been owned for 2 years before it stopped trading
Assets must have been used in the business when it ceased to trade
Assets must have been disposed of within 3 years of the business ceasing to trade
What conditions must be met to qualify for BAD for disposing of shares in a company?
Company must be/have been a trading company for the 2 years before disposal
Shares must have been held for 2y before date of disposal
Person must have been an officer or employee holding at least 5% ordinary voting shares and entitled to 5% profits and 5% on winding up for at least 2 years before date of disposal
What conditions must be met to qualify for BAD for disposing of shares in a company that used to trade?
Shares must have been owned for 2 years before stopped trading
Person must have been an officer or employee holding at least 5% ordinary voting shares and entitled to 5% profits and 5% on winding up for at least 2 years before date of disposal
Shares must be disposed of within 3 years of ceasing to trade
What is the deadline to claim BAD?
On or before the first anniversary of 31 January following the tax year in which the relevant disposal is made
What is the maximum amount of BAD a person can claim total in lifetime?
1 million
What is the intended purpose behind investors relief?
Encourage investors to invest for at least 3 years
What does investors relief do?
Reduces CGT from 20% to 10% for gains arising on disposals. of qualifying shares
What is the lifetime limit of investors relief?
10 million
What shares qualify for investors relief?
Fully paid ordinary shares issued for cash consideration on or after 17 March 2006
What conditions apply, in addition to qualifying shares, to claim investors relief?
Company is/always has been a trading company or holding company of a trading group
At the time of share issue, none of the company’s shares were listed on a recognised stock exchange
Shares held continuously since at least 6 April 2016
Individual isn’t and has not been an officer or employee of company/connected company
