Lecture 4

Question 1

What is destroyed asset relief? + how do you workout it out

What is relief? (2 )

Answer 1

If the asset is destroyed you get insurance money or compensation.
Proceeds ( insurance money ) - original cost = gain

Relief:
- if you spend all the insurance money (within 12 month) you don’t pay
- you only pay tax on the part you kept

Question 2

What is damaged asset relief?

What is rule?

Answer 2

• asset is damaged but not destroyed, you get insurance money

Rule
A / a+b x original cost
A= insurance
B = value of damaged cost

Question 3

What is roll over relief?

What is rule? (2 )

Answer 3

Selling a business asset to buy a new one

Rule :
- claim relief
- claim within 4 years

Question 4

What is hold over relief?

Answer 4

• new asset last less than 10 years
  —you stop the gain temporarily
• it becomes taxable when
• you sell it
• stop using
  -10 years pass

Question 5

What is business asset disposal relief ( badr)

What is the relief?

Answer 5

• you sell whole or part of your business
• shares in personal trading company

Relief
- gain tax at 10%
- losses are first deducted from gains
- claim by 31st jan of the second year