Skip to content

ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets

In the tax year 2025/26, Grace, a UK resident individual, made a chargeable gain of £14,000 on the sale of a painting and an allowable capital loss of £6,000 on the sale of a second asset. She has no other disposals and no unused losses from earlier years. What is the amount of her net chargeable gain, after the annual exempt amount, in 2025/26?

The taxable gain is £5,000. Current year capital losses are offset in full against current year gains, giving £8,000, and the £3,000 annual exempt amount for 2025/26 is then deducted. The loss is not restricted to preserve the exempt amount.

  1. A£5,000Correct
  2. B£8,000
  3. C£11,000
  4. D£0

Explanation

Current year losses are set against current year gains in full, before the annual exempt amount: £14,000 - £6,000 = £8,000. The annual exempt amount of £3,000 is then deducted, leaving £5,000 taxable. Choosing £8,000 forgets the annual exempt amount, and £11,000 deducts only the exempt amount and ignores the loss.

Did you get it right without looking?

One question tells you little. A timed set on The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets shows your real accuracy, how long you take and where you lose marks.

Practise The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assetsFree diagnostic mock

More The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets questions