Loss Relief for Single Companies (4) Flashcards
What are qualifying assets?
Land and buildings
Fixed plant and machinery
What happens with the gain?
It is not taxed immediately but is postponed until company makes a disposal of the replacement asset without further replacement
How is the postponement achieved?
By deducting the gain made on the old asset from cost of the new one
Wyere the disposal proceeds of the old asset are not fully reinvested?
Surplus retained reduces the amount of capital gain that can be rolled over
When must replacement asset be bought?
In the period 12 months before to 36 months after the disposal of the old asset
When must a claim be made?
Within 4 years from the end of the accounting period in which the disposal occurred
What is a depreciating asset?
An asset with an expected max life of 60 years OR fixed plant and machinery
What happens to deferred gain in a depreciating asset?
It is not deducted from the cost of the new asset
Gain is postponed to earliest of (disposal)
Disposal of new asset
Gain is postponed to earliest of (date)
Date of the new asset ceases to be used in the trade
Gain is postponed to earliest of (years)
10 years after the new asset was acquired
What if a non-depreciating asset is purchased before the deferred gain crystalises?
Original gain may be rolled over against the cost of the new, non-depreciating asset and will only crystalise on sale of non-depreciating asset
When can an entire gain be deferred in the base cost working?
When proceeds are fully reinvested into a qualifying asset within 12 months before disposal date
When proceeds not reinvested in the base cost working?
Decreases the gain deferred
When is a gain in a qualifying asset deferred?
Purchase of a qualifying asset within 3 years of the disposal date
