Capital Gains Tax – costs & proceeds
As discussed previously, capital gains tax arises when an asset is sold; the gain being the difference between the proceeds and the cost. It is important to define both of these terms.
– any costs incurred in the purchase of the asset (eg lawyers, purchase tax) can be claimed.
– assets inherited from abroad are treated under the inheritance rules above. This may lead to double taxation when estate/inheritance taxes were paid; and advice should be taken in each case. The tax office have a system (over and above what the law says) that may be a solution – but it doesn’t work in all cases.