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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: gains and losses on the disposal of movable and immovable property

Hassan previously used £700,000 of his lifetime BADR limit. He now sells a second qualifying business and makes a gain of £500,000, on which he claims BADR. He is a higher rate taxpayer and has already used his annual exempt amount. Using the tables, what is the CGT on this gain?

The CGT is £90,000, but this does not appear among the options, so the question is unreliable.

  1. A£100,000
  2. B£70,000
  3. C£112,000
  4. D£80,800Correct

Explanation

Remaining limit is £1,000,000 − £700,000 = £300,000, taxed at 14% = £42,000. The excess £200,000 is taxed at 24% = £48,000. Total £90,000. This is not among the options, so recheck: the £500,000 gain gives £300,000 at 14% and £200,000 at 24%, total £90,000.

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