08 - Capital Gains Tax

Question 1

What 3 criteria must be met for there to have been a capital gain?

Answer 1

• A chargeable disposal, by a:
• Chargeable person, of a:
• Chargeable asset

Question 2

What is a chargeable disposal?

Answer 2

• Sale of an asset
• Gift of an asset
• When as asset is lost or destroyed

Question 3

What are some exempt assets that are NOT chargeable?

Answer 3

• Cars
• UK Government stocks (GILTS)
• Principle private residence (the individuals own home)
• Wasting chattels (assets with life of <50 years ie, a racehorse)
• Non-wasting chattels bough and sold for less than £6k
• Qualifying corporate bonds
• Gambling/lottery winnings
• Stock in and ISA
• Medals for bravery (if awarded, not purchased)
• Foreign currency for personal use
• Gold sovereigns minted after 1837

Question 4

What is the incidental cost of sale of an asset?

Answer 4

The costs incurred that were necessary to the sale of the asset, for example; advertising, estate agent fees or auctioneer fees

Question 5

What is enhancement expenditure of an asset?

Answer 5

Capital expenditure that increases the value of the asset and is intact at the date of disposal, for example; and extension on a property