Tax Flashcards
Do companies pay capital gains tax?
Capital gains realised by a company are calculated in the same manner as individuals, but companies don’t pay capital gains tax; instead, their capital gains are taxed like other income of the company
What is a capital gain?
The profit realised when an individual, a partnership or company disposes of a capital asset.
How are capital gains profits calculated?
The profit is the difference between the sale price (or fair market value) of the asset when disposed and the costs of acquiring the asset (including costs of capital improvements made to the asset).
If a person is resident in the UK what is the basic rule in respect of CGT?
They are chargeable to CGT on the disposal of any chargeable assets they ow, regardless of where in the world the asset was situated.
Do individuals who are non-resident in the UK pay CGT?
Generally no, however, they would be chargeable if they dispose of interests in UK land.
What are wasting chattels?
Moveable property with a life of less than 50 years
Are wasting chattels exempt from CGT?
Yes.
If a non-wasting chattel is disposed of below a certain amount it will exempt from CGT. What is the amount?
£6,000
In what circumstances are gains not taxable?
- A transfer of property on death of the property owner (the person who takes the property takes it at its then market value known as probate value.
- A transfer between spouses (however the recipient spouse will be treated as having acquired the asset at the same cost as the donor spouse.
- A transfer to charity
When is CGT generally due and payable?
31 January following the year in which the gain was made.
When is capital gains due on disposals of UK residential property?
60 days
