Section A

Helena sold two assets during the tax year: an antique clock for £7,500 (cost £3,000) and a racehorse for £12,000 (cost £5,000). Both are tangible movable property. What is Helena's total chargeable gain before the annual exempt amount?

A racehorse is an animal, which is treated as a wasting chattel (predictable life < 50 years) and is exempt from CGT. The antique clock is a non-wasting chattel. Since proceeds (£7,500) exceed £6,000 but are less than £15,000, the marginal relief applies. Actual gain = £7,500 - £3,000 = £4,500. Restricted gain = 5/3 x (£7,500 - £6,000) = £2,500. The chargeable gain is the lower of the two, which is £2,500.