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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the scope of the taxation of capital gains

For the tax year in the Finance Act 2025 tax tables, Priya, an individual, has an annual exempt amount of £3,000 available. Which statement about the CGT rates she may face on a disposal of a chargeable asset (not residential property and with no reliefs) is correct?

CGT for individuals is charged at 18% where gains fall within the unused basic rate band and at 24% on gains above it. The tax tables for the Finance Act 2025 state these two rates, so the older 20%/28% and 10%/20% pairings are wrong.

  1. AGains are taxed at 18% or 24%, depending on her taxable incomeCorrect
  2. BGains are taxed at 20% or 28%, depending on her taxable income
  3. CGains are taxed at 10% or 20%, depending on her taxable income
  4. DAll gains are taxed at 24% whatever her income

Explanation

The tax tables give a lower CGT rate of 18% and a higher rate of 24%. The lower rate applies to the extent gains fall within any unused basic rate band, and the higher rate applies above that. The 20%/28% and 10%/20% pairs are outdated rates.

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