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ACCA Strategic Professional · Advanced Taxation (UK) · Appropriateness of planning measures to a taxpayer's circumstances and objectives

Priya has gains of £63,000 on shares in her personal portfolio and has already used her basic rate band in full. She has no losses and has not used her annual exempt amount. She asks about alternative ways to defer or reduce the CGT. Using the rates provided, what is her CGT liability on the gain at the higher rate, ignoring any reliefs other than the annual exempt amount?

The taxable gain is £63,000 less the £3,000 annual exempt amount, which is £60,000. Because her basic rate band is fully used, the whole amount is taxed at 24%, giving a CGT liability of £14,400.

  1. A£14,400
  2. B£14,040Correct
  3. C£15,120
  4. D£10,800

Explanation

Gain £63,000 less annual exempt amount £3,000 = £60,000. At the higher rate of 24% this gives £14,400. Wait: 60,000 x 24% = £14,400, so the key is the first option.

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