ACCA Strategic Professional · Advanced Taxation (UK) · Income tax: the comprehensive computation of taxable income and the income tax liability
Marcus has total income of £300,000 for 2025/26 and claims capped income tax reliefs, with no other restrictions. What is the maximum amount of those reliefs that he can deduct?
Marcus can deduct up to £75,000 of capped reliefs. The cap is the higher of £50,000 or 25% of income, and 25% of his £300,000 income is £75,000, which exceeds £50,000.
- A£50,000
- B£60,000
- C£75,000Correct
- D£100,000
Explanation
25% of £300,000 is £75,000. This exceeds £50,000, so the cap is £75,000. The £50,000 option ignores the 25% alternative.
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