Chapter 33 – Structures and Elements
33.4 Annual Exempt Amount. The annual capital gains exemption for individuals
for 2023-24 is £6,000. This amount will decrease to £3,000 for 2024-25 and
subsequent tax years.
33.11.3 Separation. The Finance (No 2) Act 2023 introduced some new statutory
CGT relief rules in respect of separation. Most notably, spouses and civil partners in
the process of separating and no longer living together have up to three full tax years
in which to transfer assets between themselves for neither a gain nor a loss after they
cease to live together, or until the date of divorce/annulment/dissolution, whichever is
earlier. Favourable tax treatment will also apply to deferred payments on disposals of
a dwelling house or part thereof under a deferred sales agreement or order in
connection with divorce etc.
Chapter 35 – Disposals: (1) General
35.2.1 Disposal Under Contract: When the Contract is Made. Special rules apply
to the operation of the period in which a person must notify HMRC that they are
chargeable to capital gains tax or corporation tax, and the time limits for assessing
chargeable gains and claiming allowable losses, where an asset is disposed of under
an unconditional contract: see the Taxation of Chargeable Gains Act 1992 s 28A
(added by the Finance (No 2) Act 2023).
Chapter 39 – Death
39.6.1.2 Annual Exemption. The annual capital gains exemption for personal
representatives for 2023-24 is £6,000. This amount will decrease to £3,000 for 2024-
25 and subsequent tax years. Note also that the amount in the textbook for 2021-22 is
incorrect and should instead read £12,300.
Chapter 40 – Trusts
40.1.2.1 Annual Exempt Amount. The annual capital gains exemption for trustees
for 2023-24 is £3,000 (one-half of the usual CGT exempt amount). The full individual
amount that applies to trusts for certain types of disability is £6,000. These amounts
will decrease to £1,500 and £3,000, respectively for 2024-25 and subsequent tax
years. Note also that the amounts in the textbook for 2021-22 are incorrect and should
instead read the usual was one-half of £12,300 or £6,150, with the full £12,300 for
trusts for certain types of disability. In 2021-22, if there were two trusts, each trust
would have £3,075 and if there were 12 settlements each would have an exemption of
the minimum of £1,230.
Chapter 42 – Capital Gains Tax and Business
42.5 Business Asset Disposal Relief (formerly Entrepreneurs’ Relief). Trustees
were entitled to entrepreneurs’ relief because the beneficiaries had been qualifying
beneficiaries of the trusts at the time of disposal (and the legislation did not require
that condition be satisfied throughout the then one-year qualifying period as HMRC
has contended): see The Quentin Skinner 2015 Settlement L and others v HMRC
[2022] EWCA Civ 1222.
Chapter 43 – Computation of Gains
43.2.1 Seven Categories of Allowable Expenditure: Rule (4): improvement
expenditure. The cost of repaying a loan made to a company increased the value of
the shares but was not ‘on’ the shares, nor was it reflected in their state or nature: see I
Tedesco v HMRC [2022] UKFTT 171 (TC). This decision is in keeping with the rather
strict interpretation of these words in the Blackwell case. Legal expenditure incurred
in defending rights to the sale proceeds from two parcels of land was not an allowable
deduction in computing the gain on one of the parcels as the expenditure was not
incurred ‘wholly and exclusively’ for that parcel and there is no provision for
apportionment: see J M Slade and another v HMRC [2022] UKFTT 227 (TC).
