Reliefs Flashcards
(25 cards)
Who gets rollover relief?
- individuals
- companies
What assets qualify for RR?
- fixed P+M
- goodwill (individuals only)
- L+B used for trade
What are the time frames for RR?
Proceeds have to be used within 1 year before sale to 3 years after sale
How does RR work?
Proceeds: 100k
Cost (50k)
Gain: 50k
ROR: 50k
New asset:
Cost: 200k
ROR: (50k)
Base cost: 150k
How does partial ROR work?
Whatever is not reinvested is chargeable
Do you get ROR on portions of private use?
No, just business use elements
Who is entitled to gift relief (GR)?
Only individuals
What assets qualify for GR?
- shares in personal trading co (will be told)
- need to have >5% of voting rights
- unquoted trading shares
- assets of a sole trader or personal co
- only on CBA (L+B and P+M) not CA (L+B, P+M and investments)
How does GR work?
- gift a qualifying asset, then use the MV at the gift as the proceeds
- any gains are deductible from the cost of the person receiving the gift (also the MV)
What if it is not an outright gift for GR?
- still use proceeds as MV
- less the cost
- actual gain is as if the proceeds were what you actually received
- the difference of the two gains is the GR
- GR is deductible from the cost (MV) to the recipient
Who is entitled to entrepreneur’s relief (ER)?
Individuals
What assets qualify for ER?
- shares in personal trading co, >5% voting rights and have been an employee for 12 months prior
- sole trader business
- assets of sole trader business within 3 years of ceasing to trade
How does ER work?
10% tax
- use up BRB furst
- apply AEA - residential first, non-ER gain and then ER gain
- 10m lifetime limit
Who is entitled to investors relief (IR)?
Individuals
What assets qualify for IR?
- unlisted traded shares held for 3 years
Who is entitled to PPR relief?
Individuals
What assets does PPR apply to?
- residential homes
How do you calculate the gain on the asset for PPR?
1) calculate gain normally
2) total period of ownership in months
3) no of months they have actually lived and deemed to be a resident (months)
4) PPR = gain x actual+deemed/total ownership
What is deemed occupation for PPR?
- last 18 months
- 3 years of absence for any reason as long as it is sandwiched between actual ownership
- any period if working abroad, sandwiched with actual resident
- 4 years of absence for working elsewhere in UK, sandwiched
Who is entitled to letting relief (LR)?
Individuals
When does LR apply?
- when the owner is absent from PPR and lets out home
What is the amount of LR?
Lower of:
- 40k
- PPR given
- gain relating to letting period after PPR
Who is entitled to SSE?
Companies
When does SSE apply?
- disposals of shares in another trading company
- need to have held 10% for the last 12 out of 24 months
