PTAX Personal Taxation Capital Gains Tax 1 FA2015

Objectives To be able to: Identify chargeable persons, assets, disposals Calculate gain on disposal Calculate CGT liability Calculate gains on Part-disposals Chattels Shares 2

Objectives To be able to: Identify exempt assets Calculate PPR relief Explain record-keeping requirements 3

4 CHARGEABLE DISPOSALS 4

5 Chargeable Disposals of Assets Sell Give away Lose Destroy 5

6 Exempt Gains In what circumstances are gain exempt from CGT?

Connected person Who is a connected person? 7

8 Connected person What is different about gains when selling to a connected person

9 GAIN ON DISPOSAL 9

10 Calculate Gain Proceeds - Costs of disposal =Net proceeds - Original cost (+ incidental costs) - Improvements = Gain Questions GD1, GD2, GD3 (optional)

11 CGT CALCULATION 11

12 Calculate CGT Total gains for year - Annual exemption = Gains subject to CGT 18% + 28% = CGT Questions CGT1, CGT2, CGT3

CGT How do you decide which tax band applies to gains? When is CGT payable? 13

14 Capital losses How do you deal with capital losses?

15 Calculate CGT with losses Total gains for year - Losses for year - Annual exemption - Losses b/f = Gains subject to CGT 18% + 28% = CGT Questions CGT4, CGT5, CGT6, CGT7 (optional)

16 PART DISPOSALS & CHATTELS 16

17 Part-disposal Cost = Whole cost x Gross Proceeds Gross Proceeds + value of remainder Questions PD1, PD2 17

Chattels What is a chattel? 18

19 Chattels: How do you calculate the gain? Bought & sold for <£6,000 Bought for >£6,000 sold for <£6,000 Otherwise

Wasting Chattel What is a wasting chattel? Questions PD3, PD4, PD5, PD6, PD7 (optional) 20

21 SHARES 21

22 Shares: match sale to purchase 1. Same day 2. Next 30 days pool

Shares: question Against which acquisitions will each disposal be matched? DateNumber of shares 5 June 2012acquisition1, May 2013acquisition May 2013disposal800 9 June 2013acquisition March 2015 disposal2, March 2015 acquisition1,750 23

Shares Bonus Rights issue Questions SH1, SH2, SH3, SH4, SH5, SH7(optional) 24

HOMEWORK CD2, GD4, CGT8, PD8 Read chapter 6 Answer review questions Tutorial book questions, 6.8, 6.9, 6.10, 6.2, 6.3, 6.4, 7.1, 7.2, 7.7, 6.5, 6.7,

PTAX Personal Taxation Capital Gains Tax 2 FA2015

27 EXEMPT ASSETS, PPR 27

28 Exempt assets What assets are exempt from CGT

29 PPR Exempt Periods When is a property deemed to be a PPR?

30 Letting relief Owner’s residence, let in part or for part of the time How much is the Letting Relief? Questions EA1, EA2, EA3, EA4 (optional)

31 CGT TAX RETURN & RECORDS 31

Records What records should you keep for capital gains 32

Tax Returns Employment Property Capital gains Questions TR1, TR3, TR5 33

HOMEWORK SH6, EA5, TR2 Read chapter 7 Answer review questions Tutorial book questions, 6.1, 6.6, 7.3, 7.6, 7.5, 4.4,