In terms of capital gains tax, how are mixed-use assets treated?

Mixed-use assets, which are assets utilized for both personal and business purposes, are treated in a specific manner under capital gains tax (CGT) regulations. When it comes to these assets, the gains made upon their sale are apportioned between the business use and the personal use of the asset. This apportionment is essential because only the portion of the gain attributable to the business use is subject to CGT.

When a mixed-use asset is sold, it's necessary to determine how much of the gain results from the time and extent to which the asset was used for each purpose. Essentially, the gain from the asset is calculated, and then it is divided according to the amount of time it was used for business versus personal purposes. This method reflects the mixed nature of the asset, ensuring that taxpayers are only taxed on the relevant portion of the gain.

For example, if an asset was used 60% of the time for business and 40% of the time for personal use, only 60% of any gain realized on the sale of that asset would be subjected to CGT.

The other options suggest either full taxation as personal assets, waiver of CGT, or only taxing profits from business use, which do not accurately reflect the regulatory approach