Flashcards in Chapter 1: Intro to CGT Deck (2)
Chargeable person, disposals, exempt assets, transfers and charities
A chargeable person can be an individual or a company, however if a company makes a chargeable gain it does not pay CGT, instead it pays corporation tax. If an individual is resident in the UK, they are chargeable to CGT on worldwide assets.
Disposals - A gift of an asset counts as a disposal as well as selling an asset. Death is not an occasion of charge for CGT purposes. The person who is left the assets by the deceased will inherit the assets with a base cost equal to market value at the date of death (probate value).
Exempt assets – cars are always exempt from CGT; however, vans and lorries are not exempt. Wasting chattels (tangible, moveable property with a useful life of less than 50 years, gilts (treasury issued stock issued by the UK gov, shares in an ISA, shares in VCTs, EIS and SEIS companies are all exempt.
Transfers – any transfer between a spouse is treated as taking place at no gain no loss.
Charities – gains on gifts of assets or sales of assets at an undervalue to charities are also treated as taking place at no gain and no loss.