ACCA Applied Skills · Taxation (UK) · The computation of capital gains tax
In the tax year 2025/26 Dev, a higher rate taxpayer, made one chargeable gain of £21,000 on quoted shares and had no capital losses. He made no other disposals. Using the annual exempt amount of £3,000 and the higher rate of 24%, what is his capital gains tax liability?
The liability is £4,320. The £3,000 annual exempt amount reduces the £21,000 gain to £18,000, and as Dev is a higher rate taxpayer this is taxed at 24%. Ignoring the exempt amount would give £5,040, which is wrong.
- A£4,320Correct
- B£5,040
- C£3,780
- D£4,860
Explanation
Taxable gain is £21,000 less the £3,000 annual exempt amount = £18,000. Tax at 24% = £4,320. £5,040 ignores the annual exempt amount (21,000 x 24%). £3,780 wrongly taxes the gain at 18%.
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