Business Tax - CGT on Chattels

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi

Can anyone explain to me the rules on capital gains tax on chattels when the gain is over £6000?

I thought that if the gain was over £6000 then you restricted the gain subject to CGT by:
5/3(proceeds - £6000)

Yet when working on question 7.2 in the Osborne book both chattels had a gain of over £6000 yet only one of them had the above formula applied. Am I missing something??? :?

Thanks

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Business Tax - CGT on Chattels

    The 5/3 rule applies where chattel proceeds exceed £6,000 and cost less than £6,000. The gain does not need to exceed £6,000.

    With the antique painting, the cost (inc. restoration) is £11,000 and proceeds are £20,000. Therefore the 5/3 rule does not apply.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Business Tax - CGT on Chattels

    Thanks.

    I'll take a look at the Osborne book again with that in mind. :)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Business Tax - CGT on Chattels

    Hi.

    Do businesses not pay Corporation Tax on gains?

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Business Tax - CGT on Chattels

    Companies pay corporation tax on their gains. They do not, however, receive taper relief or an annual exemption, only indexation allowance.

    The original question was from the Personal Tax book, not business tax, from what I recall.

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