Lost and destroyed assets
You'll learn how lost and destroyed assets are treated for capital gains tax purposes, including when you can defer tax payments by reinvesting insurance proceeds.
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In this lesson
- 0:00 Lost and destroyed assets overview
- 1:07 Full replacement and gain deferral
- 3:36 Partial replacement mechanics
- 4:50 Worked example: no replacement scenario
- 5:33 Worked example: full replacement within 12 months
- 6:25 Worked example: partial replacement scenario
- 7:42 Key principle: matching proceeds to tax liability
About this lesson
This video covers the key distinction between full and partial replacement scenarios: if you reinvest all insurance proceeds into a replacement asset within 12 months, you can defer the entire gain; if you only reinvest part of the proceeds, you'll pay tax immediately on the uninvested amount while deferring the remainder. You'll work through the mechanics of calculating chargeable gains and adjusting the base cost of replacement assets, with practical examples showing how to apply these rules in exam questions.
Duration: 8m
Transcript
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