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ACCA Applied Skills · Taxation (UK) · The computation of capital gains tax

In 2025/26 Greta, a higher rate taxpayer, made a chargeable gain of £9,000. She has capital losses of £10,000 brought forward from 2023/24. No other disposals were made in 2025/26. What is the amount of capital losses carried forward to 2026/27?

£4,000 is carried forward. Brought forward losses are only used to reduce the gain to the £3,000 annual exempt amount, so £6,000 of the £10,000 losses is used against the £9,000 gain, leaving £4,000 carried forward.

  1. A£4,000Correct
  2. B£1,000
  3. C£10,000
  4. D£7,000

Explanation

Brought forward losses are used only to reduce the gain down to the annual exempt amount. The gain of £9,000 is reduced by £6,000 of losses to £3,000, which is covered by the annual exempt amount. Losses carried forward are £10,000 - £6,000 = £4,000. £1,000 wrongly uses all the loss against the gain. £10,000 uses none. £7,000 assumes the annual exempt amount is wasted.

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