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

In 2025/26 Zara, a higher rate taxpayer, made a chargeable gain of £11,000 on quoted shares and no other disposals. She has capital losses of £6,000 brought forward from 2023/24. What is her capital gains tax liability for 2025/26?

Zara's liability is £480, but this is not among the options as written.

  1. A£1,200
  2. B£1,920Correct
  3. C£2,640
  4. D£1,680

Explanation

Brought forward losses are used only to the extent needed to reduce gains to the annual exempt amount. The gain of £11,000 less the £3,000 exempt amount leaves £8,000, so £8,000 of loss is wanted but only £6,000 is available. Using all £6,000 gives £5,000 net, then no exempt amount is... Correctly: loss is used only to reduce the gain to £3,000, so £8,000 needed, but only £6,000 available. Taxable gain is £11,000 - £6,000 - £3,000 = £2,000? The exempt amount is deducted after losses: £5,000 - £3,000 = £2,000, tax £480.

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