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Scope of CGT For Students
Scope of CGT For Students
Date of Disposal:- When the contract is made not when asset transferred
Gain: For an individual asset Pro forma: CGT computation: Mr. Jack 2008/09
£ £
Disposal proceed/ xx Total 08/09 capital gains xx
(M.V, if bargain is not at Arm’s length) less: Total 08/09 allowable losses (max possible extent) (xx)
Less: incidental disposal cost (xx) Net gain xx
(Selling cost, commission, advertising) ____ less: losses b/f 08/09 – restricted (xx)
Net disposal proceeds xx Net capital gains xx
Less: Annual exemption 08/09 (9,600)
Less: Allowable expenditure Taxable gains xx
Cost of purchase (xx)
Incidental cost of purchase (xx) Capital gain tax @ 18% xx
(Site preparation, freight, handling cost)
Subsequent expenditure (improvement) (xx)
Chargeable gain/allowable loss xx/(xx)
Administration and payment:
Returns of Information:
• A written notice of taxable gains must be sent to inspectors within 6 months of the end of tax year.
• Failure to do this, there is a penalty of up to the amount of tax unpaid on 31 January following the tax year.
Losses:
Special cases:
• Part disposal
• Chattel Disposal
• Asset Destroyed/Lost
• Shares and securities
Part disposal
Part disposal: when some portion of the asset is sold, it is known as part disposal
£
Proceeds xx
Less: incidental cost of disposal (xx)
xx
Less: Cost of the part
Capital gain xx
Chattel Disposal
£
Insurance proceed xx Gain of old asset will be
Less: cost (xx) Rolled over again cost of new asset
Capital gain/loss xx/(xx)
£ £
Cost of replacement asset xx
Less: Compensation xx
Add: Scrap value xx
Less: Deemed disposal proceed
of old asset (xx)
(xx)
Replacement asset base cost xx
Shares and securities
Bonus Shares:
Shares received free of cost Add to pool
Right Shares:
Shares received at discount Add to pool
Calculation:
£
Sale proceeds (valuation rules) xx
Less: cost (matching order) xx
Gain xx