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ACCA Applied Skills · Taxation (UK) · Gains and losses on the disposal of movable and immovable property

Jonas, a higher rate taxpayer, sold his sole trade business in the tax year and made a gain of £300,000 that qualifies for business asset disposal relief. In earlier years he had claimed BADR on gains totalling £850,000. His annual exempt amount has been fully used against other disposals. Using the Finance Act 2025 tax tables, what is the capital gains tax on the business gain?

The tax is £57,000. Only £150,000 of Jonas's £1,000,000 lifetime BADR limit is left, so that part is taxed at 14%, which is £21,000. The remaining £150,000 of gain is taxed at the higher rate of 24%, which is £36,000.

  1. A£57,000Correct
  2. B£42,000
  3. C£72,000
  4. D£48,000

Explanation

Only £150,000 of lifetime limit remains (£1,000,000 - £850,000). That part is taxed at 14%, giving £21,000. The other £150,000 is taxed at the higher rate of 24%, giving £36,000. The total is £57,000. £42,000 taxes the whole gain at 14% and ignores the earlier claims. £72,000 taxes the whole gain at 24%. £48,000 taxes the excess at 18%, which is wrong for a higher rate taxpayer.

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