13 Computation of gains and tax payable Flashcards
Who is capital gains charged on?
Chargeable persons making chargeable disposals of chargeable assets.
What are treated as chargeable disposals?(4)
1 Sale or gift of the whole or part on an asset
2 Exchange on an asset
3 Loss or total destruction of an asset
4 Receipts of a capital sum derived from an asset
What are treated as exempt disposals?
Disposals as a result of the death of an individual and gifts to charities.
What are some examples of chargeable assets?
Freehold land and buildings, goodwill, unquoted shares, certain chattels
What are examples of exempt assets
Motor vehicles (including vintage cars) • Main residence • Cash • Certain types of chattels • Investments held within an ISA • Qualifying corporate bonds (QCBs) • Gilt-edged securities • NS&I certificates • Foreign currency for private use • Receivables • Trading inventory • Prizes and betting winnings.
How is disposal proceeds calculated?
Proceeds less selling costs
When should market value be used?
When the deal was not made an arm’s length
What are allowable expenditure for capital gains?
Cost of acquisition, expenditure to enhance, expenditure to establish, preserve or defend the title to the asset and incidental costs on the acquisitions of the asset
When a asset is gifted, what is the disposal amount?
Market value at the date of the gift
What is the annual exempt amount for capital gains?
£11,100
What is meant by taxable gain?
Chargeable gains after deducting capital losses and the annual exempt amount.
What is the basic rate tax percentage for CGT?
10%
What is the tax percentage for any gains over basic rate for CGT?
20%
What is the residential property CGT rates?
18% and 28%
When is CGT payable?
31st January
