M8 - Gains and Losses and connected persons Flashcards
Trustee
Someone placed in charge of a trust
Settlor
Person whose asset is being managed in a trust
If there’s a capital transaction between connected persons, what is the first consideration?
The value of the transaction is recorded at the market value as of that date and not the actual value
If there’s a capital transaction between connected persons, and a loss arises, how is it dealt with?
The loss is offset in that current year’s tax return capital gains section or future one/ones.
What is the value of business asset disposal relief?
the tax rate on CGT is reduced to fixed rate of 10%
Limit of £1m of qualifying gains in a person’s lifetime
what was business asset disposal relief previously known as?
Entrepreneurs Reief
Explain what is Business Asset Disposal Relief?
A tax relief on business owners when they sell their business ownership (personal business or shares in another)
What is Investor’s relief
A similar relief to BADR but applies to disposal (sale) of shares in an unquoted business that the owner was never an employee or director of.
What is Investor’s relief’ tax rate?
10%
What are the two main conditions of Investors relief?
- The shares must have been owned for more than 3 years
- The shares must have been purchased after 6th April 2016
- The shares must be newly issued and acquired by subscription
what is the limit during a person’s lifetime on investors’ relief?
£10m
What is Gift Holdover Relief?
A relief that defers the payment of tax due on sale of business ownership to a connected person at under market value
What is Joint Election?
A signed agreement between the donor and the donee. It must be made within 4 years from the end of the tax year in which the gift was made.
how long must an individual keep records for tax purposes?
5 years and 10 months after the end of the tax year
how long must a company keep records for tax purposes?
6 years after the end of the CAP
