Week 5 - Capital Gains Tax Flashcards
When is Capital Gains Tax payable?
- Sale of an asset
- Gifting of an asset
- Loss of an asset
When is there no Capital Gains Tax?
- Gifts to charities
- Death
What is enhancement expenditure?
The expenditure of additional rooms in a house for example
Do you pay Capital Gains Tax if it transferred between spouses?
No
What are exempt disposals from CGT?
- Cash
- Main residence
- Cars
- Gifts and bonds
- Prizes and winnings
- Assets held in ISA
- Wasting chattels and non wasting chattel if sold for less than 6000
- Inventory/receivables
If an asset was inherited, the acquisition cost would be?
The market value at date of death
If an asset was acquired as a gift, the acquisition cost would be?
The market value at the date of gift
Can unused annual exemption be carried forward?
No
If there are still losses left over, can they be saved to help lower taxes in later years?
Yes
What are the CGT rates?
10% - Basic rate
20% - Higher/additional
Residential property basic - 18%
Residential property higher/additional - 24%
When is payment of CGT made?
31 January - at the end of tax year
What is the formula when only part of the asset is sold?
Original cost x (market value of part disposed of) / (market value of part disposed of + market value of part retained)
Are wasting chattels exempt from CGT?
Yes
If a non wasting chattels is greater than £6000 what is the gain?
Normal gain
If a non wasting chattels is less than £6000 what is the gain?
Exempt
If a non wasting chattel SP is greater than £6000 but cost is less what is the gain?
5/3 x (SP-£6000)
If a non wasting chattel SP is less than £6000 but cost is more what is the gain?
Normal loss but assume SP is £6000
