ACCA Applied Skills · Taxation (UK) · The computation of capital gains tax
In 2025/26 Sven, an additional rate taxpayer, made a chargeable gain of £2,500 and an allowable capital loss of £4,000 in the same tax year. He has no losses brought forward. Which statement is correct?
The net loss of £1,500 is carried forward and the annual exempt amount is wasted. Current year losses must be set fully against current year gains regardless of the exempt amount, and losses cannot be carried back for a living individual.
- AThe net loss of £1,500 is carried forward and the annual exempt amount is not usedCorrect
- BThe net loss of £1,500 is carried back to the previous year
- CThe annual exempt amount of £3,000 is used first and the loss of £4,000 is carried forward in full
- DThe loss of £4,000 is restricted to £2,500, with £1,500 lost
Explanation
Current year losses must be set against current year gains in full, without regard to the annual exempt amount. Gains of £2,500 less losses of £4,000 gives a net loss of £1,500 to carry forward, and the exempt amount is wasted. The loss cannot be carried back for a living individual. The £4,000 loss cannot be preserved by using the exempt amount first, nor restricted.
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