ACCA Applied Skills · Taxation (UK) · Gains and losses on the disposal of movable and immovable property
In 2026/27 Hana, a higher rate taxpayer, has chargeable gains of £20,000 on shares and a current-year capital loss of £5,000 on a different asset. She also has capital losses brought forward of £4,000. What is her capital gains tax liability?
The liability is £1,920. The current-year loss reduces the gain to £15,000. Brought forward losses of £4,000 are then used, leaving £11,000, and the £3,000 annual exempt amount is applied, giving £8,000 taxable at 24%.
- A£1,920Correct
- B£2,400
- C£2,880
- D£1,440
Explanation
Current-year loss is set against the gain first: £20,000 − £5,000 = £15,000. Brought forward losses are used only to reduce the gain to the annual exempt amount, so £15,000 − £3,000 = £12,000 needs only £12,000 reduction, but losses brought forward are limited to £12,000 of gain above £3,000; using £4,000 gives £8,000 taxable. At 24% this is £1,920.
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