R03 Part 1 Week 2

Question 1

What are the three conditions for CGT to be due?

Answer 1

A chargeable disposal, of a chargeable asset, by a chargeable person.

Question 2

What is a chargeable disposal?

Answer 2

It includes sales, gifts, exchanges, and transfers of assets.

Question 3

Name three exempt assets under CGT.

Answer 3

Main residence, private motor vehicles, NS&I products.

Question 4

What is the CGT annual exemption for individuals in 2025/26?

Answer 4

£3,000.

Question 5

What are the CGT rates for 2025/26?

Answer 5

18% for basic rate taxpayers, 24% for higher/additional rate taxpayers.

Question 6

What is Private Residence Relief (PPRR)?

Answer 6

Relief from CGT on the sale of your main home.

Question 7

What is Letting Relief?

Answer 7

Relief for periods when part of the main residence was let out, up to £40,000.

Question 8

What is Business Asset Disposal Relief (BADR)?

Answer 8

Reduces CGT to 14% on qualifying business assets up to £1 million lifetime limit.

Question 9

What is Holdover Relief?

Answer 9

Defers CGT on gifts of business assets or shares by transferring the gain to the recipient.

Question 10

What is the deadline for paying CGT on residential property sales?

Answer 10

Within 60 days of completion.

Question 11

What is Inheritance Tax (IHT)?

Answer 11

A tax on a person’s estate on death and on certain lifetime transfers.

Question 12

What is the Nil Rate Band (NRB) for 2025/26?

Answer 12

£325,000.

Question 13

What is the Residence Nil Rate Band (RNRB) for 2025/26?

Answer 13

£175,000.

Question 14

What is the IHT rate on death?

Answer 14

40% on the estate above the NRB, or 36% if 10%+ of the estate is left to charity.

Question 15

What is a Potentially Exempt Transfer (PET)?

Answer 15

A gift that becomes exempt from IHT if the donor survives for 7 years.

Question 16

What is a Chargeable Lifetime Transfer (CLT)?

Answer 16

A gift that may be subject to IHT immediately, typically into a trust.

Question 17

What is Taper Relief?

Answer 17

A reduction in IHT on gifts made 3–7 years before death.

Question 18

What is the 7-year rule?

Answer 18

Gifts made more than 7 years before death are exempt from IHT.

Question 19

What is the 14-year rule?

Answer 19

CLTs made more than 7 years before death can still affect the NRB for later gifts made within 7 years of death.

Question 20

What is Quick Succession Relief (QSR)?

Answer 20

Reduces IHT if an inherited asset is taxed again within 5 years.

Question 21

What is a Gift with Reservation of Benefit (GWR)?

Answer 21

A gift where the donor retains benefit; it remains in their estate for IHT.

Question 22

What is Pre-Owned Asset Tax (POAT)?

Answer 22

An income tax charge on benefits from assets previously owned and gifted.

Question 23

What is Business Relief?

Answer 23

Up to 100% IHT relief on qualifying business assets held for 2+ years.

Question 24

What is Agricultural Property Relief?

Answer 24

Up to 100% IHT relief on qualifying agricultural property.

Question 25

What is the purpose of a Deed of Variation?

Answer 25

To alter the distribution of an estate after death, within 2 years.

Question 26

What is the difference between residence and domicile?

Answer 26

Residence is your tax status for a specific year; domicile is your permanent home country.

Question 27

What is the Statutory Residence Test (SRT)?

Answer 27

A test to determine UK tax residency based on days spent in the UK and ties to the UK.

Question 28

What are the three parts of the SRT?

Answer 28

Automatic non-UK resident test, automatic UK resident test, sufficient ties test.

Question 29

How many days must you be in the UK to be automatically UK resident?

Answer 29

More than 183 days in the tax year.

Question 30

What is a “sufficient tie” under the SRT?

Answer 30

UK family, accommodation, work, 90+ days in UK in previous 2 years, or more time in UK than any other country.

Question 31

What is a “temporary non-resident”?

Answer 31

Someone who leaves the UK for less than 5 years after being UK resident for 4 of the previous 7 years.

Question 32

What is Long-Term Residence (LTR)?

Answer 32

Being UK resident for 10 out of the last 20 tax years.

Question 33

What is the IHT “tail” for LTR?

Answer 33

Period after ceasing UK residence during which foreign assets remain subject to UK IHT.

Question 34

What is the Foreign Income and Gains (FIG) regime?

Answer 34

Provides 4 years of UK tax exemption on foreign income/gains for new UK residents after 10 years abroad.

Question 35

What is the Temporary Repatriation Facility (TRF)?

Answer 35

Allows remittance of foreign income/gains at reduced tax rates (12% in 2025/26–2026/27, 15% in 2027/28).

Question 36

What is CGT rebasing for former remittance basis users?

Answer 36

Foreign assets are rebased to their value on 5 April 2017 for CGT if certain conditions are met.