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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: gains and losses on the disposal of movable and immovable property

Priya, a UK resident, has taxable income of £30,700 after the personal allowance in 2025/26. She sells a non-residential investment property for a gain of £20,000, and has no losses and no other gains. What is her capital gains tax liability?

Her liability is £3,660. After the £3,000 annual exempt amount, taxable gains are £17,000. The first £7,000 fits in her unused basic rate band and is taxed at 18%, giving £1,260, and the remaining £10,000 is taxed at 24%, giving £2,400.

  1. A£3,660Correct
  2. B£3,060
  3. C£4,080
  4. D£4,800

Explanation

Gain £20,000 less annual exempt amount £3,000 gives £17,000 taxable. Unused basic rate band is £37,700 − £30,700 = £7,000, taxed at 18% = £1,260. The remaining £10,000 is taxed at 24% = £2,400. Total is £3,660. Taxing all at 24% on £17,000 gives £4,080, which is wrong because it ignores the basic rate band.

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