CGT reliefs

Question 1

Rollover relief

Answer 1

defers payment of tax on gains on disposal of qualifying business asset whilst trade is carried on as rolled over into base cost of replacement asset

Question 2

Rollover relief - Qualifying business assets
Land and buildings

Answer 2

Yes - if occupied and used for trade purposes

Question 3

Rollover relief -Qualifying business assets
Fixed plant and machinery

Answer 3

Yes

Question 4

Rollover relief - Qualifying business assets
Ships aircraft and hovercraft

Answer 4

Yes

Question 5

Rollover relief - Qualifying business assets
Satellites, space station and space craft

Answer 5

es

Question 6

Rollover relief - Qualifying business assets
Goodwill

Answer 6

Yes - for sole traders and partners, not for companies

Question 7

Rollover relief - asset must be acquired in

Answer 7

1-3 years of disposal of the first asset

Question 8

Claim for rollover relief must be made within

Answer 8

the later of four years of the end of the tax year in which the gain is realised or new asset acquired

Question 9

Rollover relief - depreciating assets

Answer 9

Gain not rolled over by reducing cost, but deferred until crystallises on earliest of:
- disposal of replacement
- 10 years after replacement acquired
- Date replacement asset ceases to be used in trade (not on death)

Question 10

Gift relief

Answer 10

claim may be made for gain arising on gift of business asset to be deferred until recipient disposes of asset at later date

Question 11

Gift relief - qualifying assets
Assets used in business carried on by donor’s personal company (>5% voting rights)

Answer 11

Yes

Question 12

Gift relief - qualifying assets
shares / securities in trading company where unquoted or donor’s personal company

Answer 12

Yes

Question 13

Gift relief - qualifying assets
gift of shares / securities where donee is company

Answer 13

No

Question 14

How does gift relief work

Answer 14

deemed cost of acquisition (MV at date) reduced by amount of gain that would have been chargeable, causing higher gain in future

Question 15

Restriction on gift relief on shares in a personal company gain =

Answer 15

gain * Chargeable business assets/Chargeable assets

Question 16

Gift relief - Any excess of actual consideration over base cost is

Answer 16

immediately chargeable, remaining gain subject to gift relief

Question 17

BADR - Qualifying assets
All or part of trading business individual carries on alone/in parternship

Answer 17

Yes

Question 18

BADR - qualifying assets
assets of individual’s or partnership’s trading business following cessation of business

Answer 18

Yes

Question 19

BADR - qualifying assets
Shares (and securities of) individuals personal trading company (or holding company of trading group)

Answer 19

Yes

Question 20

Personal trading company criteria

Answer 20

Individual owns at least 5% share capital and exercise at least 5% of voting rights and EITHER or BOTH:
- Holding makes individual beneficially entitled to at least 5% of profits for distribution to shareholders and on winding up 5% of assets AND OR
If all ordinary shares disposed, individual beneficially entitled to at least 5% of proceeds

Question 21

BADR - Share disposal criteria - individual must be

Answer 21

officer or employee of the company, or a company within the same group

Question 22

BADR - Ownership period - asset must have been held for a period of

Answer 22

two years
if cessation - asset must have been disposed of within 3 years of cessation

Question 23

BADR - assets owned personally but used in business - disposal

Answer 23

does not qualify for releif

Question 24

BADR - Calc

Answer 24

Net gains and losses in respect of business disposal
tax at 10% after deducting loss and AE

Question 25

BADR - lifetime limit

Answer 25

£1 million for disposals on or after 11 March 2020

Question 26

BADR lifetime limit prior to 11 March 2020

Answer 26

£10 million

Question 27

Time limit for claiming BADR

Answer 27

12 months from 31 January following tax year in which qualifying disposal is made

Question 28

BADR - Election if cease to be personal company - conditions

Answer 28

- new issue result in company ceasing to be personal company immediately prior to issue, if shareholder disposed all shares, BADR would have been available

Question 29

BADR - Election if cease to be personal company - if election is made

Answer 29

individual deemed to sold all shares immediately before issue, then re-acquired at market value Further election to defer gain until actual disposal in future

Question 30

If BADR and gift relief both claimed, which first?

Answer 30

Gift relief first then BADR

Question 31

Investors relief applies to

Answer 31

Disposals of certain qualifying shares by individuals, disposals charged at 10% regardless of cinome

Question 32

Investors relief - qualifying shares shares must:

Answer 32

- have been subscribed for as new ordinary shares by disposer - be in unlisted trading company/holding company of trading group - have been issued on or after 17/03/16 Been held continually for 3y before disposal, starting from later of acquisition at 6/4/17

Question 33

Investors relief - lifetime limit

Answer 33

£10m

Question 34

Private residence relief

Answer 34

allows some or all gain of disposal of private residence to be non-chargeable to CGT

Question 35

Private residence

Answer 35

Taxpayers only/main residence, including grounds or gardens up to half a hectare or such as is required for enjoyment of house having regard to size and character

Question 36

Periods of deemed occupation are:

Answer 36

Any periods of up to 3 years of absence for ay reason any periods where individual was required to live abroad any period up to 4 years required to live elsewhere due to work any period up to 24 months if prevented living there due to being built/altered/necessary steps to dispose of previous residence

Question 37

Periods of absence must be

Answer 37

proceeded by period of actual occupation and followed by occupation, but not required to resume residence if terms of employment to work elsewhere

Question 38

Can claim PRR on business use?

Answer 38

No - will get last 0 months if it was at some point used for non-business

Question 39

Letting relief

Answer 39

if property occupied as price residence is disposed of and some gain chargeable, letting relief may be available if property has been let out and there has been shared occupation

Question 40

Letting relief is the lowest of

Answer 40

letting gain PRR 40,000

Question 41

Letting gain =

Answer 41

shared occupation / total * gain