Capital gains

Question 1

Exempt persons

Answer 1

Registered charities and pension schemes

Question 2

Exempt disposals

Answer 2

Gifts to charities and museums
Leaving assets in will upon death

Question 3

Exempt assets

Answer 3

Cash
Wasting chattels except P&M used in a business
Non-wasting chattel bought and sold for under £6k
Gilt-edged securities
Qualifying corporate bonds
National Savings Certificates and Premium Bonds
ISAs
Cars

Question 4

Chargeable assets

Answer 4

Land and buildings
Shares
Goodwill
Works of art
Leases
Crypto
Plant and Machinery (if sold for profit, use non-wasting chattel rule)

Question 5

Part disposals

Answer 5

Allowable cost for disposal = Cost x (MV of part disposed / total MV)

Question 6

The amount of s.261B loss is the lower of…

Answer 6

Unrelieved trading loss
Current year gains - current year capital losses and all capital losses b/f

Question 7

Share matching order for disposals by individuals

Answer 7

1. Acquisitions made on the same day as the date of disposal
2. Acquisitions made within the following 30 days
3. Shares in the s.104 pool (all shares acquired prior to disposal)

Question 8

Quoted share value

Answer 8

Average of quoted prices

Question 9

Capital gains tax reliefs

Answer 9

Private residence and letting relief
Rollover relief - deferral
Gift relief for business assets - deferral
Business asset disposal relief / Investor’s relief - reduced rate of CGT (10%)

Question 10

Private residence relief

Answer 10

Reduces gain arising from disposal of an individual’s home based on the periods the property was occupied as the main residence
The property must have been the individual’s main residence - an election can be made if an individual has more than one residence

Question 11

Types of deemed occupation

Answer 11

Last 9 months of ownership
Up to 3 years absence for any reason
Up to 4 years absence whilst working elsewhere
Any period whilst working overseas
Up to 2 years whilst prevented from living in the residence

Question 12

Rollover relief

Answer 12

Defers CGT payable when a business asset is sold and the proceeds are reinvested in another qualifying business asset
100% relief if all proceeds are reinvested
Is some proceeds are retained, the chargeable gain is the lower of the amount not reinvested and the gain on disposal

Question 13

Business asset disposal relief

Answer 13

Required ownership of 2 years or more
Substantial part of an unincorporated business or its assets or employee’s shares in a trading company greater than 5% of total holding
£1m limit

Question 14

Investor’s relief

Answer 14

New unquoted shares issued after 17/3/2016 and held for 3 years or more
Investor can’t have worked for the company
£10m limit

Question 15

Letting relief

Answer 15

Lower of
- Letting gain (chargeable months / total months) x chargeable gain
- PRR (exempt months / total months) x chargeable gain
- £40k