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ACCA Applied Skills · Taxation (UK) · Gains and losses on the disposal of shares and securities

Marcus sold his entire 100% shareholding in Delta Ltd, an unlisted trading company, on 15 September 2025. He had been a director and employee of Delta Ltd and held the shares for six years. He has made no previous disposals qualifying for business asset disposal relief. His gain was £200,000. Ignoring the annual exempt amount, what is the capital gains tax at the business asset disposal relief rate on this gain?

The capital gains tax is £28,000. Marcus qualifies for business asset disposal relief as a director and employee holding all the shares in a trading company, and the £200,000 gain is within the £1,000,000 lifetime limit, so it is taxed at the 14% rate.

  1. A£28,000Correct
  2. B£36,000
  3. C£48,000
  4. D£24,000

Explanation

The conditions for business asset disposal relief are met (trading company, officer/employee, at least 5% holding, held for the qualifying period). The gain is within the £1,000,000 lifetime limit, so the rate is 14%. £200,000 x 14% = £28,000. The £36,000 figure uses the 18% lower rate, and £48,000 uses the 24% higher rate.

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