Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Taxation effects of the financial decisions made by businesses and individuals

Delta Ltd plans to issue new shares to an individual investor. Which statement is correct about the investor's capital gains tax position on a later sale, using the 2025/26 tax tables?

Investors' relief can apply to qualifying shares in an unlisted trading company, giving a 14% capital gains tax rate on qualifying gains up to a £1,000,000 lifetime limit, per the 2025/26 tax tables. This can make equity finance more attractive to outside investors.

  1. AInvestors' relief gives a 14% rate on qualifying gains, up to a £1,000,000 lifetime limitCorrect
  2. BInvestors' relief gives a 10% rate with a £5,000,000 limit
  3. CInvestors' relief gives the 24% higher rate whatever the circumstances
  4. DInvestors' relief has no lifetime limit

Explanation

The tax tables show investors' relief at a 14% rate with a £1,000,000 lifetime limit. Other figures are not in the tables.

Did you get it right without looking?

One question tells you little. A timed set on Taxation effects of the financial decisions made by businesses and individuals shows your real accuracy, how long you take and where you lose marks.

Practise Taxation effects of the financial decisions made by businesses and individualsFree diagnostic mock

More Taxation effects of the financial decisions made by businesses and individuals questions