Lecture 1

Question 1

What is capital gain tax?
How do you workout it out
For e.g you buy shares for 1,000 and you sell it for 1,500

What is chargeable asset? 3 examples

Answer 1

• a tax you pay on profit (gain ) you get for selling something valuable. You only get taxed on the money you get not the sale price
• sales price (1,500) - original cost (1,000) = 500 ( capital Gain)
• chargeable asset = you get taxed on valuable asset if you sell for a profit
  E.g land and buildings, shares and personal items worth over 6,000 c

Question 2

What are not chargeable assets? 5 things

Answer 2

1. Any car you use personally
2. Wasting chattels ( animals )
3. Gifts to charities
4. Premium bonds or certain types of government saving certificates
5. ISAS or pensions

Question 3

Who are chargeable person who pays tax ( 3 people )

And who doesn’t ( 2 people)

Answer 3

Taxed:
1. Individual
2. Personal representive ( handling someone’s assets after death )
3. Trustees ( managing money or property for others )

Not taxed:
1. Companies
2. Charities

Question 4

What are things you don’t pay capital gains on?

What are things you pay cgt but it is less money ( 3 things)

Answer 4

No :
- home - its called private residence relief

Pay cgt but less :
1. Business asset disposal ( pay 10% when you are selling business asset)

2. Gift hold over
   - if you give a business asset to someone they take over your gain
3. Roll over relief
   - if sell one business asset and buy another

Question 5

What is tax free amount of gain each year that everyone gets?

How are much are basic rate taxpayers paying?

And higher/additional rate tax payer

Answer 5

6,000 AEA

Basic tax payer
10% assets
18% residential property

Additional /higher
20% on assets
24 on residential property

Question 6

What if you sell an asset for less than you paid?

Answer 6

• capital loss ( if you sell an asset less than you paid )
• you can use your losses to reduce your gains