Chattels Flashcards
What is a chattel?
A tangible moveable property
What is a wasting asset?
An asset with an estimated remaining useful life of <=50 years
What is the expected life of non-wasting chattels from date of disposal?
> 50 years
How are non-wasting chattels chargeable?
To capital gains tax (CGT)
Original cost and gross proceeds <£6000
Wholly exempt. No need to calculate any gain
Original cost <£6000 and gross proceeds >£6000
Any gain restricited to 5/3. Calculate gain, compare to maximum, take the lower figure
Original cost >£6000 and gross proceeds <£6000
Gross proceeds deemed to be £6000. Do normal calculation but always use £6000 as proceeds figure
Original cost and gross proceeds >£6000
Normal disposal (Proceeds - cost = Gain)
Are wasting chattels exempt
Yes as there are no chargeable gains and no allwable losses
Exception to wasting chattels exemption?
Items of plant and machinery used in a trade are not exempt merely on grounds they are wasting. But cars are always exempt
Where does wasting chattels exemption apply to?
Chattels on which CA have been claimed or could have been claimed. Chattels rules based on £6000 do apply
Where a chattel on which CA have been obtained at a loss?
The allowable cost for chargeable gains purposes is reduced by lower of the loss and net amount of allowances given
When relief for the loss has already been given through the capital allowances computation?
There is no gain and no loss
If a chattel is sold at a gain?
Cost is not adjsuted for CA. As CA will have been clawed back through balancing charge
What is a wasting asset/
One which has an estimated useful life of 50 years or less and whose original value depreciates over time
