ACCA F6 四川大学工商管理学院 课件Chapter 13

Example
Which of the following disposals may give rise to a capital gain? 1. Sale of shares in an unquoted trading company. 2. Gift of antique painting. 3. Sale of 13% Treasury stock 2013. 4. Exchange, with a friend, of a house for an apartment. 5. Sale of a motor car to brother at less than market value. 6. Gift of a London flat by an individual who is neither resident nor ordinarily resident in the UK.
3 The annual exempt amount




An annual exemption is for each tax year. For 2011/12 the annual exempt amount is £10,600. The annual exempt amount is deducted from the chargeable gains for the year after the deductions of losses and other reliefs. If Sue has chargeable gains for 2011/12 of £15,000, her taxable gains are £15,000 – £10,600= £4,400 Notes: Do not forget to deduct the annual exempt amount. Only one time for one tax year.
Answer for (c)
£ 10,000 (10,000) 0
Chargeable gains for year Less: Annual exempt amount Taxable gains for 2011/12
5 CGT payable by individuals

Taxable gains are chargeable to capital gains tax at the rate of 18% or 28% depending on the individual’s taxable income.
Allowable losses brought forward



When losses are brought forward, current year losses are deducted in priority. Allowable losses brought forward are only set off to reduce current year chargeable gains less current year allowable losses to the annual exempt amount. No set-off is made if current year chargeable gains less current year allowable losses do not exceed the annual exempt amount (10,600). Example 4.3 (b) (c)

× (×) × (×) (×) (×) × (×) (×) (×) ×
×
Notes:


An unincorporated business is not treated as a separate entity for capital gains tax purposes. Therefore, when a business is disposed of, you should deal with each asset separately (to get chargeable gains for each asset). CGT is calculated by each tax year.
2 Computing a gain or loss
Calculation format Disposal consideration / proceeds (or market value) Less: incidental costs of disposal Net proceeds Less: original cost of acquisition capital expenditure incurred in enhancing the asset incidental costs of acquisition Chargeable gain Less: allowable losses for year Less: allowable losses (b/f) Less: annual exempt amount Taxable gains (taxable income) for the year Tax rates CGT payable
Answer
￡ Disposal proceeds Less: incidental costs of disposal Net proceeds Less: original cost of acquisition enhancement expenditure incidental costs of acquisition ￡ 320,000 5,300 314,700
4 Capital losses

Calculation of losses
Losses are, in general, calculated in the same way as gains.
Deduct allowable capital losses from capital gains in the tax year in which they arise.
Answer for (a)
£ 11,000 (6,000) 5,000 (5,000) 0
Chargeable gains for year Less: allowable losses for year
Less: Annual exempt amount taxable gains for 2011/12
Example
Andy sold a factory on 15 February 2012 for £320,000. The factory was purchased on 24 January 1990 for £164,000, and was extended at a cost of £37,000 during March 2000. Andy incurred legal fees of £3,100 in connection with the purchase of the factory, and legal fees of £5,300 in connection with the disposal. Andy has taxable income of £65,000 in 2011/12. Calculate Andy’s capital gains tax liability for the towable losses of the same year




Allowable capital losses arising in a tax year are fully deducted from chargeable gains arising in the same tax year. Any loss which cannot be set off is carried forward to set against future chargeable gains. Losses must be used as soon as possible. Example 4.3 (a)
164,000 37,000 3,100
204,100 Chargeable gain 110,600 Less: annual exempt amount (10,600) Taxable gains (taxable income) for the year 100,000 CGT payable （*28%） 28,000 Andy’s capital gains tax liability will be due on 31 January 2013.
1 Chargeable persons, disposals and assets



A gain is chargeable if there is a chargeable disposal of a chargeable asset by a chargeable person. Chargeable persons: individual or a company Chargeable disposals: - Sales of whole assets or parts of assets - Gifts of assets or parts of assets - The loss or destruction of assets Chargeable assets: all forms of property unless some exempt assets (certain chattels and motor cars)
The consideration for a disposal