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ACCA Applied Skills · Taxation (UK) · Gains and losses on the disposal of shares and securities

Carla made a gain of £8,000 on selling shares and, in the same year, made a loss of £6,500 on selling gilt-edged securities. She has no other disposals or brought forward losses. Using the annual exempt amount of £3,000, what is her taxable gain?

Taxable gain is £5,000. Losses on gilts are not allowable because gilts are exempt assets, so the £8,000 share gain is reduced only by the £3,000 annual exempt amount.

  1. A£5,000Correct
  2. B£0
  3. C£1,500
  4. D£3,500

Explanation

A loss on gilts is not allowable because gilts are exempt assets, so the loss cannot be set against the £8,000 gain. The gain of £8,000 less the annual exempt amount of £3,000 gives £5,000. Setting the gilt loss off would wrongly give £0 (8,000 - 6,500 = 1,500, less 3,000, nil).

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