Morse, Williams And Salter State That The Law Relating To Capital Gains Tax

Morse, Williams and Salter state that the law relating to capital gains tax was first consolidated by the Capital Gains Act 1979 and was further consolidated in 1992 by the Taxation of Chargeable Gains Act.
It is important to note that under the Taxation of Chargeable Gains Act 1992 all forms of property are assets for the purposes of the Act whether or not they are situated in the United Kingdom. This Act replaced the indexation allowance with taper relief but this only applies to business assets but it did also make provision for relief where a person has made a gain on the sale of a private dwelling house. This relief is provided for in sections 222 and 223. These sections provide as follows. Section 222 provides that the disposal of an individual's principal private dwelling house, which includes grounds of up to 0.5 hectares is exempt from capital gains tax. Section 223 makes provision for the amount of relief that should be applied to the exemption provided for by section 222.
In order to qualify for this relief the seller must have occupied the dwelling house as his only or main residence throughout his period of ownership but ignoring any period of ownership prior to 31st March 1982. It is important to note that it will not be of any concern if the house has not been the only or main residence for all or part of the last 36 months of ownership. This exception takes into account the situation where the taxpayer has moved to a new house before he has been able to dispose of his old house. If an individual has more than one residence it is a question of fact which one constitutes his only or main residence. The taxpayer can determine this question by making an election within 2 years of acquiring a second property which will backdated for up to 3 years.
On a concluding note to this study, it would appear that since 1965 there have been a number of changes to the capital gains tax system which have benefitted those people making disposals of landed property as they now have an tax exemption that did not originally exist.
______________________________________________BIBLIOGRAPHY
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