ACCA Applied Skills · Taxation (UK) · The computation of capital gains tax
In 2025/26 Nadia, a higher rate taxpayer, made chargeable gains of £20,000 and allowable losses of £6,000 on disposals in the same tax year. She has no losses brought forward. What is her capital gains tax liability for 2025/26?
The liability is £2,640. The £6,000 current-year loss is deducted from the £20,000 gain, leaving £14,000. The £3,000 annual exempt amount reduces this to £11,000, taxed at 24% as she is a higher rate taxpayer.
- A£2,640Correct
- B£3,360
- C£4,800
- D£1,440
Explanation
Current year losses are set against current year gains first: £20,000 - £6,000 = £14,000. Deduct the £3,000 annual exempt amount to get £11,000. Tax at 24% = £2,640. £3,360 ignores the exempt amount's order of use (taxing £14,000). £4,800 ignores the loss and uses the exempt amount (17,000 x 24% would be £4,080, so this is wrong). £1,440 deducts the losses after the exempt amount twice.
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