ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets
Dev subscribed for new shares in an unquoted trading company and has held them for over three years. He is not an employee or officer of the company. He sells them, making a gain of £1,200,000, and has made no previous claims for Investors' Relief. Ignoring the annual exempt amount and assuming he is a higher rate taxpayer, what is the capital gains tax payable?
Not determinable from options.
- A£288,000
- B£168,000Correct
- C£190,000
- D£148,000
Explanation
The first £1,000,000 of gain qualifies for Investors' Relief at 14%, giving £140,000. The remaining £200,000 is taxed at the higher rate of 24%, giving £48,000. Total tax is £188,000. Check: 140,000 + 48,000 = 188,000. This total does not match any option exactly.
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