It is important to remember to keep detailed records of any asset that you acquire as you will eventually need these records to effectively dispose of the asset later down the line. 

When it comes to determining the capital gain on any given sale, we must calculate the effective cost of the asset, you might think that this would simply be the amount that you paid for it, but in many cases this is not true. Investment properties as an example are increased in value by modifications made to the property, while depreciation decreases the value of the property.

Different asset groups have different rules on what constitutes a value altering event.

When it comes to the disposal of an asset, calculating the value of the disposal is typically simpler if the disposal is a straightforward sale. Determining the value of the sale can be a lot more complex in scenarios where the disposal involves non-monetary trades or gifting the asset to another individual.

There are different ways to calculate the value of the asset in any scenario where the disposal is not done through a simple sale.

Capital gains tax might not always apply to the sale of assets if you are considered to be trading as a business. If you are considered to be trading as a business, then rather than having to pay capital gains tax, you will instead pay income tax on the profits.

There are many factors to determine whether you are trading as a business or if you are making a capital trade, some of the key factors are as follows:

• The primary purpose of acquiring the asset is to trade it
• Your acquiring and disposal activities are carried out with the due diligence of carrying on a business
• The frequency and regularity of your trades