FACTOR= PV R1 AT 12% : TABLE A (RIGHT COLUMN) LIFE XPECTANCY = LIFE EXPECTANCY: TABLE A USE LEFT COLUMN

Transcription

1 1 CALCULATIONS OF LIMITED INTERESTS MEANINGS MV = MARKET VALUE BD = BARE DOMINIUM HOLDER BC = BASE COST FACTOR= PV R1 AT 12% : TABLE A (RIGHT COLUMN) TERM = PV R1 AT 12 %: TABLE B LIFE XPECTANCY = LIFE EXPECTANCY: TABLE A USE LEFT COLUMN USUFRUCTUARY VALUATION FOR ESTATE DUTY IF THE DECEASED IS THE USUFRUCTUARY AND PASSING MV OF PROPERTY X 12% X OVER THE FACTOR OF NEXT USUFRUCTUARY = VALUE IN ESTATE OF DECEASED NOTE: IF USUFRUCTUARY IS USING FOR A FIXED TERM - WORK ON THE SHORTER OF THE TERM OR LIFE EXPECTANCY OF USUFRUCTUARY IF THE DECEASED IS THE USUFRUCTUARY AND CEASING THE LESSOR OF: MV OF PROPERTY X 12% X OVER THE FACTOR OF THE BD HOLDER OR MV OF PROPERTY LESS THE ORIGINAL BD CREATED THE LESSOR = VALUE OF USUFRUCT IN THE DECEASED'S ESTATE IF THE DECEASED IS THE BD HOLDER MV OF PROPERTY X 12% X OVER THE FACTOR OF THE USUFRUCTUARY = VALUE OF USUFRUCT MV OF PROPERTY LESS THE VALUE OF USUFRUCT = BD HOLDER VALUE THAT IS INCLUDED IN THE DECEASED ESTATE

2 2 IF THE DECEASED IS THE BD HOLDER BUT THERE ARE STILL MORE THAN ONE USUFRUCTUARY ALIVE. DETERMINE THE LIFE EXPECTANCY OF ALL THE USUFRUCTS AND USE THE LONGER LIFE EXPECTANCY. MV OF PROPERTY X 12% X OVER THE FACTOR OF THE USUFRUCT WITH THE LONGEST LIFE EXPECTANCY = VALUE IN THE ESTATE OF THE BD HOLDER. CALCULATION OF THE USUFRUCT AND BD HOLDER WHEN IT IS CREATED AT DATE OF DEATH OF CREATOR : MV OF PROPERTY X 12% X FACTOR OVER PERSONS WHO OBTAINS THE USE = USUFRUCTUARY VALUE MV OF PROPERTY LESS THE USUFRUCTUARY VALUE = VALUE OF THE BD HOLDING. REMEMBER: IF ANY OF THESE DISPOSALS ARE GRANTED TO A SPOUSE = THAT VALUE WILL BE USED FOR A SECTION 4Q DEDUCTION FOR ESTATE DUTY IN THE ESTATE OF THE CREATOR. VALUATION FOR DONATIONS TAX IF THE USUFRUCT AND OR BD WERE DONATED - THEN IT WILL ATTRACT DONATIONS TAX. IF THE USUFRUCT WAS DONATED DETERMINE: THE LIFE EXPECTANCY OF DONOR (1) AND DONEE (2) IF GIVEN FOR A FIXED TERM (3 )TO THE DONEE SELECT THE SHORTER OF THE 3 ABOVE MV OF PROPERTY X 12% X FACTOR OF THE SHORTER ABOVE = THE VALUE FOR DONATION PURPOSES IE IF THIS VALUE WAS R , THEN LESS EXEMPTION = X 20% = R TAX PAYABLE BY DONOR.

3 3 IF THE BD HOLDING WAS DONATED DETERMINE: THE LIFE EXPECTANCY OF DONEE (1) OR THE FIXED TERM (2) SELECT THE SHORTER OF THE 2 ABOVE MV OF PROPERTY X 12 % X OVER THE FACTOR OF THE SHORTER PERIOD ABOVE = VALUE OF USUFRUCT MV OF PROPERTY LESS THE VALUE OF THE USUFRUCT = THE VALUE OF THE BD VALUE OF BD IS THE AMOUNT DONATED. THEN LESS R EXPEMTION MULTIPLIED BY 20% = DONATIONS TAX PAYABLE VALUATION FOR CAPITAL GAINS PURPOSES AT DATE OF DEATH OF CREATOR : MV OF PROPERTY X 12% X FACTOR OVER PERSON WHO OBTAINS THE USE = USUFRUCTUARY VALUE (1) MV OF PROPERTY LESS THE USUFRUCTUARY VALUE = VALUE OF THE BD HOLDING. (2) REMEMBER: IF ANY OF THESE DISPOSALS ARE GRANTED TO A SPOUSE = THAT VALUE WILL BE A ROLL OVER UNDER PARA 67 FOR CGT PURPOSES PART DISPOSAL FORMULA VERY NB: VALUE OF PART DISPOSAL / FULL MV X FULL BC = BC OF PART DISPOSAL IF USUFRUCT ATTRACTS CAPITAL GAIN VALUE OF USUFRUCT (1) / FULL MV X FULL BC = BC OF USUFRUCT VALUE OF USUFRUCT (1) LESS BC OF USUFRUCT = GAIN FOR USUFRUCT NOTE: USUFRUCTUARY INHERITS THE VALUE OF USUFRUCT AS BC OR IF SPOUSE, SHE INHERITS THE BC OF THE USUFRUCT AS BC. IF BD HOLDING ATTRACTS CAPITAL GAIN VALUE OF BD (2) / FULL MV X FULL BC = BC OF BD HOLDING VALUE OF BD (2) LESS THE BC OF BD = GAIN FOR BD HOLDING NOTE: THE BD HOLDER INHERITS THE VALUE OF THE BD (2) AS BC OR IF SPOUSE, INHERITS THE BC OF THE BD HOLDING.

4 4 FIDUCIARY INTEREST FIDUCIARY = PERSON CURRENTLY ENJOYING THE ASSET FIDEICOMMISSARY = PERSON TO WHOM THE ASSET WILL ULTIMATELY PASS TO WHEN FIDUCIARY DIES VALUATION FOR ESTATE DUTY IF THE DECEASED IS THE FIDUCIARY MV OF PROPERTY X 12% OVER FACTOR OF THE FIDEICOMMISSARY = VALUE IN THE DECEASED ESTATE IF THE DECEASED IS THE FIDEICOMMISSARY MV OF PROPERTY X 12% OVER THE FACTOR OF THE FIDUCIARY = VALUE IN THE DECEASED ESTATE VALUATION FOR DONATIONS TAX DETERMINE: THE LIFE EXPECTANCY OF DONOR (1) AND DONEE (2) IF GIVEN FOR A FIXED TERM (3 )TO THE DONEE SELECT THE SHORTER OF THE 3 ABOVE MV OF PROPERTY X 12 % X FACTOR OF THE SHORTER PERIOD ABOVE = VALUE FOR DONATIONS TAX PURPOSES. VALUATION FOR CAPITAL GAINS PURPOSES FIRST THE CREATOR FULL MV OF PROPERTY LESS FUL BC OF PROPERTY = GAIN FOR CGT PURPOSES IF THE DECEASED IS THE FIDUCIARY MV OF PROPERTY X 12% OVER THE FICUCIARY'S FACTOR [NB THIS IS NO MISTAKE] = VALUE OF INTEREST FOR CAPITAL GAIN (*) HOWEVER! BECAUSE THE FIDUCIARY EXPIRES, IT IS CONSIDERED TO HAVE NO VALUE FOR CGT SO NO LOSS OR GAIN. (ASSUME NOT TRADING) NOTE: MV OF PROPERTY LESS VALUE OF INTEREST ABOVE (*) = BC FOR THE FIDEICOMMISSUM ## IF THE DECEASED IS THE FIDEICOMMISSARY MV OF THE PROPERTY AT TIME OF DEATH LESS THE BC INHERITED (##) FROM THE FIDUCIARY = CAPITAL GAIN FOR THE FIDEICOMMISARRY

5 5 ANNUITIES CHARGED ON PROPERTY ANNUITANT = THE PERSON WHO RECEIVES THE ANNUITY PROP OWNER = THE OWNER OF THE PROPERTY SUBJECT TO THE ANNUITY VALUATION FOR ESTATE DUTY IF THE DECEASED IS THE ANNUITANT AND THE ANNUITY CEASES ANNUAL VALUE OF ANNUITY X FACTOR OF THE PROP OWNER = VALUE OF ANNUITY IN THE DECEASED ESTATE OF THE ANNUITANT IF THE DECEASED IS THE ANNUITANT AND THE ANNUITY CONTINUES TO ANOTHER ANNUAL VALUE OF ANNUITY X FACTOR OF THE NEXT ANNUITANT =VALUE OF ANNUITY IN THE DECEASED ESTATE OF THE ANNUITANT IF THE DECEASED IS THE PROP OWNER ANNUAL VALUE OF THE ANNUITY X FACTOR OF THE ANNUITANT = VALUE OF THE ANNUITY MV OF PROPERTY LESS THE VALUE OF THE ANNUITY = VALUE OF PROPERTY IN THE PROP OWNER DECEASED ESTATE. VALUATION FOR DONATIONS TAX IF THE ANNUITY CHARGED ON PROPERTY WAS DONATED DETERMINE: THE LIFE EXPECTANCY OF DONOR (1) AND DONEE (2) IF GIVEN FOR A FIXED TERM (3 )TO THE DONEE SELECT THE SHORTER OF THE 3 ABOVE ANNUAL VALUE OF ANNUITY X FACTOR OF THE SHORTER PERIOD ABOVE = VALUE FOR DONATIONS TAX PURPOSES.

6 6 IF THE PROPERTY THAT THE ANNUITY WAS CHARGED ON WAS DONATED DETERMINE THE LIFE XPECTANCY OF THE ANNUITANT (1) AND IF ANNUITY IS FOR A FIXED PERIOD (2) USE THE FACTOR OF THE SHORTEST OF THE 2 ABOVE ANNUAL VALUE OF THE ANNUITY X FACTOR OF THE SHORTEST OF THE 2 ABOVE = VALUE OF ANNUITY MV OF PROPERTY LESS THE VALUE OF THE ANNUITY = VALUE OF PROPERTY DONATED FOR DONATIONS TAX PURPOSES VALUATION FOR CAPITAL GAINS PURPOSES CGT WILL ONLY PLAY A ROLE IF THE PROPERTY ON WHICH THE ANNUITY IS CHARGED IS DISPOSED OF. THE ANNUITY IS REVENUE IN NATURE AND DOES NOT ATTRACT CGT IF PROPERTY CHARGED WITH AN ANNUITY IS DISPOSED OF NORMAL CGT CONSEQUENCES WOULD APPLY ON THE FULL MARKET VALUE. THE ANNUITY THAT IS PAID OUT OF THE RENTAL IS A DEDUCTION FOR INCOME TAX PURPOSES AND HENCE CANNOT FORM PART OF THE BASE COST.

7 7 ANNUITIES NOT CHARGED ON PROPERTY IE PERSONAL OBLIGATION ANNUITANT = THE PERSON WHO RECEIVES THE ANNUITY PAYOR = PAYOR THAT IS OBLIGATED TO PAY THE ANNUITY VALUATION FOR ESTATE DUTY IF THE DECEASED IS THE ANNUITANT AND THE ANNUITY CEASES THE ANNUITY CEASES THERE IS NO VALUE FOR ESTATE DUTY PURPOSES IF THE DECEASED IS THE ANNUITANT AND THE ANNUITY CONTINUES TO ANOTHER ANNUAL VALUE OF ANNUITY X FACTOR OF THE NEXT ANNUITANT =VALUE OF ANNUITY IN THE DECEASED ESTATE OF THE ANNUITANT IF THE DECEASED IS THE PAYOR FULL MARKET VALUE OF THE PROPERTY WOULD BE INCLUDED FOR ESTATE DUTY PURPOSES. HOWEVER THE VALUE OF THE ANNUITY OVER THE FACTOR OF THE ANNUITANT COULD BE A DEDUCTION FOR ESTATE DUTY PURPOSES AS A LIABILIY THAT HAS TO BE PAID FROM THE ESTATE. VALUATION FOR DONATIONS TAX IF THE ANNUITY WAS DONATED TO ANOTHER DETERMINE: THE LIFE EXPECTANCY OF DONOR (1) AND DONEE (2) IF GIVEN FOR A FIXED TERM (3 )TO THE DONEE SELECT THE SHORTER OF THE 3 ABOVE ANNUAL VALUE OF ANNUITY X FACTOR OF THE SHORTER PERIOD ABOVE = VALUE FOR DONATIONS TAX PURPOSES. IF THE PROPERTY WAS DONATED TO ANOTHER NORMAL CALCULATION WOULD APPLY HERE MV OF PROPERTY DONATED LESS R EXEMPTION AT 20%

8 8 VALUATION FOR CAPITAL GAINS TAX THE ANNUITY IS OF A REVENUE NATURE SO WILL NOT ATTRACT CGT IF DONATED TO ANOTHER OR DISPOSED OF TO ANOTHER. HOWEVER IF THE PROPERTY IS SOLD - THIS IS NOT BURDENED WITH AN ANNUITY SO NORMAL CGT FORMULA APPLIES. I DO NOT BELIEVE THAT THE ' POTENTIAL COST' OF THE ANNUITY WOULD BE ALLOWED TO BE INCLUDED INTO ' HOLDING COSTS' FOR BASE COST PURPOSES EVEN IF THE PROPERTY WAS HELD FOR TRADE. DO NOT FORGET IN ALL INSTANCES : IF YOU DONATE SOMETHING - THEN A PORTION OF DONATIONS TAX FORMS PART OF BASE COST FOR CGT PURPOSES FORMULA TO BE UTILISED: GAIN OF PROPERTY (MV- BC) MV OF PROPERTY X DONATIONS TAX PAYABLE PORTION OF DONATIONS TAX THAT CAN BE USED IN BASE COST