Bloomsbury Professional Capital Gains Tax 2021/22

Preface 6 Table of examples 14 Table of statutes 20 Table of statutory instruments and other guidance 34 Table of cases 36 List of abbreviations 44 Chapter 1 Introduction to capital gains tax 46 Signposts 46 What is chargeable as a gain 46 History of CGT 48 Who is chargeable to CGT 51 Exempt assets or gains 52 The capital gains tax calculation 58 Reporting of gains 66 Self-assessment procedures 71 Payment of tax 76 Compliance assurance and penalties 78 Chapter 2 Disposals 88 Signposts 88 Definition of assets and disposals 88 When asset value is lost 94 Compensation and other receipts 97 Special situations 100 Chapter 3 Computation of gains and losses 104 Signposts 104 Computational rules 105 Consideration for the disposal 107 Connected persons 114 Delayed or deferred consideration 117 Allowable expenditure 125 Calculation and use of losses 132 Deduction of reliefs 142 Chapter 4 Particular assets 146 Signposts 146 Shares and securities 146 Options and deposits 152 Chattels 154 Wasting assets 155 Finance arrangements 158 Assets appropriated to or from trading stock 160 Chapter 5 Foreign issues 164 Signposts 164 Introduction 164 Basis of the charge to CGT 165 Foreign assets 166 Location of assets 169 Territorial limits of CGT 170 Residence and ordinary residence prior to 6 April 2013 – the old law 181 Statutory residence test to determine residence from 6 April 2013 – the current rule 182 Non-residents doing business in the UK 189 Anti-avoidance: temporary non-residence 192 Foreign assets of non-UK domiciled taxpayers 195 Apportionment of non-resident company’s gains 207 Double tax relief 211 Offshore (non-UK resident) settlements 211 Penalty regime 214 Increased penalties to tackle offshore tax evasion 214 New criminal offence of failing to declare offshore income/gains 216 Compliance disclosure opportunity – ‘requirement to correct’ 217 Extension of offshore limits 219 Chapter 6 Partnerships 220 Signposts 220 How CGT applies to partnerships 220 Partnership assets and ‘other’ assets 224 Disposal of partnership assets 227 Change in fractional share of assets 231 Limited liability partnerships 236 HMRC Statement of Practice D12 237 Chapter 7 Administration of an estate 246 Signposts 246 Introduction 246 Capital gains tax in the period to the date of death 247 Capital gains tax in the administration of an estate 248 Legatee or beneficiary 257 Main residence relief 258 Deeds of appointment, variations or disclaimers 261 Sales by legatees 266 Chapter 8 Capital gains tax – settlements 268 Signposts 268 Introduction 269 Definition of ‘settlement’ and ‘settled property’ 270 The creation of a settlement 271 Actual and deemed disposals by trustees 275 Disposal of interests in settled property 280 Sub-fund elections 282 Rates of tax 283 Particular transactions affecting trusts 286 Exemptions and reliefs 288 Main residence relief and trustees 295 Main residence relief, trusts and hold-over of gain under TCGA 1992, s 260 300 Settlor-interested settlements 302 Residence of trust 304 Trusts for vulnerable and disabled persons 306 Compliance 308 Chapter 9 Companies 310 Signposts 310 Basis of charge 310 Rebasing 314 Indexation allowance 317 Capital losses 322 Identification of shares 324 Groups of companies 326 Relief on disposal of shares 333 Chapter 10 Land and property 340 Signposts 340 Outline 340 Treatment of land transactions 341 Part disposals of land 342 Leases of land 344 Residential property 350 Furnished holiday lettings 352 Non-resident CGT 356 Annual tax on enveloped dwellings (ATED) 360 Profits taxed as income 362 Chapter 11 Main residence relief 364 Signposts 364 Scope of the relief 365 What constitutes a residence? 366 Other uses of a residence 371 Extent of the property 375 Periods of occupation 379 Two or more residences 386 Divorce and separation 394 Chapter 12 Business asset disposal relief (formerly entrepreneurs’ relief) 398 Signposts 398 Introduction 399 Operation of the relief 401 Claiming the relief 410 Shareholders 410 Sole traders 421 Partners 426 Trustees 429 Post-cessation disposals 429 Associated disposals 432 Deferred gains 438 Interaction with other reliefs 445 Chapter 13 Hold-over relief for gifts 446 Signposts 446 Forms of hold-over relief 446 Gifts of business assets 447 Operation of TCGA 1992, s 165 relief 449 Special situations 455 When relief is denied 459 Gifts subject to IHT (TCGA 1992, s 260) 466 Where relief is denied or clawed back 468 Claims and valuations 468 Chapter 14 Roll-over relief for business assets 472 Signposts 472 Overview of roll-over relief 473 Conditions 473 Period for reinvestment 476 Qualifying activities 479 Asset classes 484 Use of assets 488 Operation of the relief 490 Depreciating assets 492 Claims 495 Interaction with other reliefs 497 Chapter 15 Incorporation of a business 500 Signposts 500 Overview 500 Effect of the relief 501 The conditions 503 Election to forgo incorporation relief 510 Computing the relief 512 Interaction with other reliefs 517 Chapter 16 Venture capital reliefs 520 Signposts 520 Four venture capital reliefs 521 Seed Enterprise Investment Scheme 523 EIS disposal relief 528 EIS share identification rules 533 EIS deferral relief 535 How to claim EIS deferral relief 537 What happens when the conditions are broken 541 Interaction with other reliefs 544 When EIS relief is withdrawn or clawed back 548 Venture capital trusts 556 Social investment tax relief 561 Chapter 17 Investors’ relief 566 Signposts 566 Overview 566 Company conditions 568 Investor conditions 569 Share conditions 572 Share reorganisations 575 Claiming the relief 576 Chapter 18 Other reliefs 578 Signposts 578 Employee-ownership trusts 578 Employee shareholder status 580 Loans to traders 582 Share loss relief 586 Gifts to the nation 592 Chapter 19 Tax planning versus tax avoidance 594 Signposts 594 Tax planning 594 Tax avoidance 595 Basic tax planning 595 Anti-avoidance rules 604 Disclosure of tax avoidance schemes 609 Index 614 "Taking a practical approach to the subject and concentrating on the most commonly found transactions and reliefs, Capital Gains Tax 2021/22 is an invaluable title for those who deal with capital gains tax on a regular basis. The latest edition examines the current legislation and HMRC guidance in a clear, comprehensive style and explores the following: - Issue of nudge letter to prompt offshore disclosure - HMRC consultation into how better to support taxpayers to fulfil their offshore tax obligations/compliance - Case law ? - HMRC v Embiricos - the Upper Tribunal reversed the FTT decision and determined that HMRC cannot issue a partial closure notice in respect of an enquiry into a taxpayer's claim to the remittance basis without specifying the amount of tax due - The Commissioners for HM Revenue and Customs v (1) The Quentin Skinner 2005 Settlement L (2) The Quentin Skinner 2005 Settlement R (3) The Quentin Skinner 2005 Settlement B (Trusts and qualifying period for BADR) - Stephen Core v HMRC and Phillips v HMRC (Main residence relief) The commentary in this title includes numerous examples, updated to the current tax year, and is cross-referenced to the tax legislation as well as to the HMRC manuals and to other HMRC guidance. This accessible reference guide has a user-friendly structure with 'signposts' at the beginning of each chapter to summarise key topics and 'focus points' throughout to highlight important issues, as well as numerous worked examples demonstrating how to apply the main principles in practice."-- Provided by publisher