Business Reliefs (for CGT)

Question 1

What are the 8 criteria for entrepreneurs relief?

Answer 1

1) individuals
2) dispose business/business asset/incl. shares!
3) £10,000,000 over lifetime
4) shares disposal (trading co., 5%+, employee
5) ER reduces basic rate band space
6) must’ve owned for 1+ years prior
7) claim before 31st Jan, following tax year
8) no AEA on ER (treat separately at 10%

Question 2

What 3 items is gift relief given on, and on what 1 stipulation?

Answer 2

1) business assets
2) unquoted shares, trading co.
3) quoted shares, trading co., 5%+

• UK resident

Question 3

Proforma for gift relief?

Answer 3

m. v. or proceeds X
- cost (X)
- sale amount (X)

= amount taxed immediately X

Question 4

What is the base cost?

Answer 4

m.v. or proceeds - amount paid

Question 5

What is gift relief effectively/what does it do?

Answer 5

Rolls over the relief into the subsequent disposal of the asset

Question 6

What action cancels out gift relief and then becomes taxable immediately?

Answer 6

Transferee moving abroad within 6 years of transfer

Question 7

Gift of qualifying shares proforma?

Answer 7

Total gain x (m.v. of chargeable business assets/m.v. of chargeable assets)

Question 8

What is rollover relief?

Answer 8

Relief on replacement of business assets

Question 9

What 5 criteria apply to rollover relief?

Answer 9

1) qualifying assets only (fixed PPE, 60+ years)
2) co. and individuals
3) similar type and function (for trade)
4) proceeds reinvested in replacement
5) uninvested proceeds deducted from gains and taxed

Question 10

What is the timing stipulation for rollover relief?

Answer 10

Replace within:

-12 months ~ +36 months

Question 11

What rollover relief is applied to depreciating assets?

Answer 11

If

Question 12

At what rate is entrepreneurs relief given?

Answer 12

10%