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Capital gains tax

Capital gains tax 13/14

QuestionAnswer
First line of a capital gains tax computations Proceeds
What might you substitute instead of money received for a capital gain if the transaction was not at "arms length" Market value
What is the formula for working out the cost in a part-disposal? A/A+B where A is the proceeds from the part sold and B is the market value of the remainder.
What can you deduct from sales proceeds in a CGT computation? Sales expenses
What is the order for matching shares? Shares bought on the same day, shares bought in the next 30 days, shares in the FA1985 pool.
What is the formula used when selling an asset for just over £6,000? Calculate gain as normal. Compare with 5/3(proceeds - £6,000). Take the lower.
The last four years of ownership of a property are deemed occupation. True or false? False, 3 years.
How many years absence are you allowed as deemed occupation for working abroad for PPR purposes? Any amount
How many years are you allowed as deemed occupation when working away from home for PPR purposes? 4 years
What is the formula for calculating exempt amount for PPR? Period of occupation (as PPR)/Period of ownership
How many years at the end of ownership are you allowed as PPR whether or not you are living in the property? 3 years for any reason.
What is the rule when you make a loss and you have sold an asset for less than £6,000? Substitute £6,000 as proceeds
What is the date for payment of CGT? 31 January following the end of the tax year ie 31/1/15
Can you include improvement expenditure in the cost of an asset? Yes, provided the improvement is still there at the time of sale.
What can you deduct from sale proceeds in a CGT computation? Selling expenses, expenses of purchase, improvement expenditure, cost of asset and indexation (if relevant)
An asset with a life of less than 40 years is a wasting asset. True or false? False, it's 50 years.
What are the % for taxing capital gains 18% and 28%
What is the annual exemption for 13/14 £10,900
You must use current year losses against current year gains. True or false? True
You can skip brought forward losses forward a year if you choose to. True or false? True but only if you have used some of the losses against current year gains to bring the gains down to the annual exemption
Losses brought forward can be carried forward indefinitely. True or false True. If you are constantly making losses then these can be carried forward, but if you make a gain above the annual exemption then you must use the losses.
Gains on selling gilts are exempt from CGT. True or false? True
Created by: amandacavanagh