Module 5: Capital Gains Flashcards
1
Q
What is the basic CGT format? (7 steps)
A
. Capital gains
. Less Capital losses
. Less Annual exclusion
. Less assessed capital loss carried forward
. Net capital gain
. Inclusion rate
. Taxable capital gain
2
Q
When does a capital GAIN arise?
A
When proceeds from disposal exceeds base cost.
3
Q
When does a capital LOSS arise?
A
When proceeds from disposal are lower than base cost.
4
Q
What is the formula for proceeds?
A
Selling price
Less output VAT
Less recoupments
5
Q
When is selling price not applicable and market value would be used instead? 3 instances
A
. Donation
. Disposal not measurable in money
. Disposal to connect person not at arm’s length
6
Q
What is ‘valuation date’?
A
1 October 2001, when CGT came into effect.
