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ACCA Applied Skills · Taxation (UK) · The basic principles of computing gains and losses

Elena, a higher rate taxpayer, sold shares in 2025/26 for a gain of £23,000 and sold land for a loss of £8,000. She has no other disposals and no losses brought forward. Ignoring reliefs, what is her capital gains tax liability for 2025/26 if the shares and land are both subject to the main rates?

The liability is £2,880. Net gains of £15,000 after the £8,000 loss, less the £3,000 annual exempt amount, leave £12,000 taxable, charged at the 24% higher rate for a higher rate taxpayer.

  1. A£2,880Correct
  2. B£3,360
  3. C£4,800
  4. D£4,320

Explanation

Net gain is £23,000 - £8,000 = £15,000. Less annual exempt amount £3,000 gives £12,000 taxable. At the higher rate of 24% the tax is £2,880. The £3,360 option wrongly deducts only the loss from the gain and then uses 24% on £14,000.

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