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RESOURCES & LINKS Taxation (UK): https://www.gotitpass.com/tx Got It Pass: https://www.gotitpass.com Find me on Facebook: https://www.facebook.com/GotitPass This video is about an activity to discuss gift relief, a tax relief that allows individuals to give assets to family members under certain conditions, deferring any capital gains tax. This concept is similar to rollover relief. The activity includes a scenario where an asset is gifted from a mother to her daughter, Danielle, and requires the calculation of the chargeable gain for the tax year 2023-2024 and the future capital gains tax cost for the property. The focus is on a freehold property, partially used for trade and for residential accommodation. Since gift relief only applies if the asset is fully used for trade, the calculations will reflect this partial use. The scenario begins with the mother, Gerald Dean, transferring her business, which includes only the freehold property as a chargeable asset. The property was previously bought for £100,000 and has a market value of £350,000 at the time of the gift. To find the chargeable gain, the market value is important since there are no actual proceeds from the gift. The calculation involves determining the gain based on the market value and the original cost while acknowledging that gift relief must be restricted due to the property's partial use. Only 60% of the gain is eligible for gift relief. The chargeable gain remains for the residential portion of the property. The second part of the task asks for Danielle's future base cost, which is derived from her receiving the property at market value, adjusted for the held-over gain from the gift. Her base cost will be set at £200,000 after accounting for the portion of the gain that is held over due to the gift relief. Overall, the activity emphasizes the importance of recognizing the conditions surrounding gift relief, particularly the requirement for full trade use, as it affects the calculations of both the chargeable gain and future costs related to the asset. The exercise illustrates the calculations clearly while outlining the implications of the gift relief scheme. #acca #taxation #accatx #accacourse #accatraining #accaexam #accounting #uktax #uktaxation #capitalgaintax #CGT #giftrelief
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