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Connected party disposals |
See Also
Select from the following headings:
Background | Developing the schedule | Completing the Schedule | Standard Sub-Schedules | Carry Forward | Related Errors
This schedule should be developed where losses on connected party disposals (or otherwise) need to be tracked separately. Where there is a transaction between connected persons, this is generally deemed to be at open market value (TCGA 1992 ss 17 & 18(2)); this amount is used to calculate the chargeable gain on disposal to the connected party and will form the base cost on any subsequent disposal. Where the disposal to the connected party produces an allowable loss, this may only be offset against gains to the same connected party in the current or future periods ( TCGA 1992 s 18(3)).
The CTSA legislation introduced changes to the order in which capital losses are utilised, namely losses arising after 1 July 1999 should first be relieved before losses arising prior to that date.
This schedule is developed from the Capital gains summary schedule.
Some of the cells are described in more detail as follows:
Connected person
Enter the name of the connected person. This will then be transferred to the Chargeable gains summary schedule.
Description
Enter a short description of each asset.
Total
Enter the gain or loss arising on each disposal to the connected party. The deemed consideration is generally the open market value of the asset. The software will compute the overall loss or gains for the period and carry forward any loss for future offset against gains on disposals made to the same connected party.
From the Connected party disposals schedule the user is able to develop the same standard or non standard supporting schedules, listed in full on the Chargeable gains summary schedule, for other sales to the connected party in the period. This excludes the Other series of chargeable gains schedules.
The Connected party disposals schedule will then summarise the overall position in respect of the party and transfer the relevant figures to the main Chargeable gains summary schedule.
On carry forward, this schedule is automatically developed in the subsequent computation if it is present in the prior year computation.
The capital loss and pre-entry loss carried forward will beautomatically entered as brought forward figures onto the Connected party disposals schedule in the subsequent computation.
Error | How to
solve it |
| Capital losses c/f are positive | This error
results from the sign conventions used within the software.
This error can be resolved by clicking the
|
| Capital losses b/f are positive | This error
results from the sign conventions used within the software.
This error can be resolved by clicking the
|
| Proceeds reinvested cannot exceed total proceeds | Proceeds from the sale of an asset that are reinvested in a new asset qualify for rollover relief and defer the chargeable gain on the asset. The figure that is reinvested cannot exceed the proceeds from the sale of the asset. |
| Can only rollover gains remover reinvestment figure | The gain on the sale of an asset may be reinvested in the cost of the new asset, thus deferring the gain. Any reinvestment made must be entered as a positive number. |
| Enter reinvestment as a positive number on this schedule | The gain on the sale of an asset may be reinvested in the cost of the new asset, thus deferring the gain. Any reinvestment made must be entered as a positive number. |
© 2009 Thomson Reuters.