Personal Tax - help needed on Capital Gains Tax

Jonno1

Hi, I'm sitting the Personal Tax module later this week, and am busy going through the Osborne Books Practice Assessments for FA 2012. I've found difficulty in working out wy the following answers are given:

Sale proceeds £7,000, cost £5,000 - why does chattel marginal relief apply?

Sale proceeds £3,000, cost £8,000 - why sale proceeds deemed to be £6,000?

Sale proceeds £15,000, cost £21,000 why calculate loss as normal?

Many thanks,

Jonno1

SamiH

Jonno,

It might be worthwhile having a read of this, it might help you understand

http://www.hmrc.gov.uk/helpsheets/hs293.pdf


Sami

Clintm15

Hi Jonno,

The reason that chattel marginal relief applies to #1 is because the asset cost under £6,000. If the sales proceeds had also been under £6,000 it would be entirely exempt.

For #2 any chargeable chattel that is sold at a loss for under £6,000 has it's loss limited by deeming the proceeds to be £6,000.

#3 is normal quite simply because the previous 2 rules don't apply.