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ACCA Applied Skills · Taxation (UK) · The scope of the taxation of capital gains

In the tax year 2025/26, Marcus, a UK resident higher rate taxpayer, made the following disposals. He sold a private car, which cost £8,000, for £15,000. He sold an antique table for £5,500 that had cost £2,000. He sold quoted shares for £30,000 that had cost £22,000. He has no other disposals and no capital losses. Using the Finance Act 2025 tax tables, what is Marcus's capital gains tax liability for 2025/26?

The private car is exempt and the table sold for under £6,000 so its gain is exempt. Only the £8,000 share gain is chargeable. After the £3,000 annual exempt amount, £5,000 is taxed at 24%, so the liability is £1,200.

  1. A£1,200Correct
  2. B£1,920
  3. C£2,400
  4. D£3,600

Explanation

The private car is an exempt asset. The table sold for £5,500, under the £6,000 chattel limit, so its gain is exempt. Only the share gain of £8,000 is chargeable. Less the £3,000 annual exempt amount, £5,000 is taxed at 24%, giving £1,200. Option £2,400 wrongly uses 24% on £10,000 or ignores the exempt amount partly.

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