M4 - Capital Gains Taxation Flashcards
What are the two exemptions to a chargeable disposal?
- asset transferred due to death
- gifts of assets to charities
three criteria of a chargeable gain?
- Chargeable disposal (asset is no longer owned)
- Chargeable asset
- Chargeable person (business or individual)
What is an Indexation Allowance?
Adjusts gain on sale of asset to account for time value of money. Uses RPI. Stopped after Dec 2017
Rule for transferring asset to spouse or civil partner?
no chargeable gain or loss
What happens if indexation causes a loss to increase?
It is ignored.
What happens if indexation turns a gain into a loss?
Gain becomes nil. Never a loss figure due to indexation
Steps for calculating total chargeable gains in tax return
- calculate gain or loss for each individual disposal
- Add chargeable gains together, remembering that any losses are now nil
- offset gain with any brought forward loss from prior CAPS
Matching and pooling shares for individuals three steps?
- same day acquisitions
- Acquisitions in the next 30 days
- The share pool using AVCO method (all shares owned before the date of sale)
what is a 1 for 2 bonus issue?
A company rewards shareholders with a free share for every two shares they already own
Matching and pooling shares for companies three steps?
- same day acquisitions
- Acquisitions in the last 9 days
- The share pool using AVCO method (all shares owned before the date of sale)
when is the indexation allowance allowed up until?
December 2017
What is Rollover Relief?
A form of relief which defers the date tax is payable in the future on the chargeable gain when a replacement asset is purchased with the proceeds
What are the three types of rollover relief?
- Normal rollover relief
- Rollover relief given in insurance situations
- Holdover relief
What is holdover relief?
The same as rollover relief except for assets which depreciate (have a life of less than 60 years)
What determines how much relief is obtained in holdover and rollover relief claims?
The proceeds and how much was reinvested into the same asset class