Tuesday, 4 October 2016

Capital Gains Tax

For several years I avoided acquiring assets which were to be held for the short term, being aware that gains which were "realized" on the sale of assets which were purchased and sold in the short term or in less than a year or twelve months would attract a tax which was exorbitant to my pocket in Trinidad and Tobago at that time.  See Wikipedia for a great definition on Capital Gains Tax. https://en.wikipedia.org/wiki/Capital_gains_tax

In real terms this capital gains tax would have been charged on cars, property and possibly everything under the sun, given the way that the law was written. 

In hind sight,  in auditing financial statements one would note: the date of purchase and sale of the asset,  the value of  the transaction, then the frequency with which the transactions occurred.

However please see the link to the UK Govt site on Capital Gains which is more comprehensive with respect to understanding CGT. UK taxes were included in at least one course as part of my studies in ACCA. https://www.gov.uk/capital-gains-tax/overview

Also here is a link to the US site on  the topic of Capital Gains if you are looking for a comparative view on the subject. https://www.irs.gov/uac/ten-important-facts-about-capital-gains-and-losses https://www.irs.gov/pub/irs-prior/i1040sd--2010.pdf

All of the above would lead to the next question and the next!!!

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