Tax reliefs Flashcards
(17 cards)
When does gift relief apply?
Assets used in trade of donors business
Asset used in trade of personal trading company (>5%)
Unquoted trading shares
Shares in donors personal trading company (>5%)
How does gift relief work?
Calculate gain on donor (proceeds = MV at date of gift)
Defer gain
Calculate base cost for donee
Restricted for sales at under value (chargeable = Proceeds - original cost) relief is the balance
When does replacement of business asset relief apply
Sale of land and buildings, goodwill, fixed plant and machinery and reinvesting all/some of proceeds within 12 months before and 3 years after disposal
How to calculate replacement of business asset relief (ROR)
Calculate gain on seller, defer the gain and and take from cost to recalculate base cost
Partial reinvestment
- Amount that cannot be deferred = lower of
Gain or proceeds reinvested.
BADR applies
Disposing qualifying asset where held for >2 yrs ending with date of disposal.
To all/part unincorporated trading business
Assets of business following cessation
Share in personal trading company (>5%) if also an employee
BADR calc
10% taxed
Lifetime limit £1m
Holdover relief
Replacement of depreciating asset
Freeze gain until sold again or 10th anniversary or ceases to be used in trade.
Investors relief
Unlisted ordinary shares in trading company
Held for 3 years min
Not an employee or officer
Lifetime limit £10m. 10% tax
Periods of deemed occupation for PRR
Last 9 months of ownership
Must be followed by actual occupation:
- 3 yrs for any reason
- Working abroad
- 4 yrs working in UK
Lettings relief
Lower of
- 40,000
- PRR given
Part of the gain after PRR relating to period of letting
Business Property Relief
100%
- Sole trader business/partnership share
- Shares in unquoted trading company
50%
- Shares in quoted trading co (>50%)
- Land and buildings.P+M owned by individual/used in partnership they control
2 yrs min holding
Quick succession relief
gift within 5 yrs prior to death
Tax paid on first transfer x (net transfer/gross transfer)* rel %
Related property
Shares = Value of whole shareholding x(transferor’s shares /shares held by couple)
Other asset = Val of property x transferor’s val/(Transferor’s val + value of related property)
Marginal relief
(U-A) x (TTP/A) * 3/200
Company R&D
Add: disallowed exp
Add: RDEC (20% qual revenue R&D)
Less: Non trading income
Less: Capital allowances
Deduct RDEC from tax liability
Loss groups
> 75% links
direct and indirect
Gain loss group
> 75% direct
> 50% indirect
