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ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising corporation tax liabilities

Tamsin Ltd has a 12-month period to 31 March 2026 with no associated companies. It has a chargeable gain of £140,000 and brought forward capital losses of £50,000 from earlier periods. It has no other capital transactions. What is the net chargeable gain included in taxable total profits?

The net chargeable gain is £90,000. Companies have no annual exempt amount, so the brought forward capital losses of £50,000 are set in full against the current-period gain of £140,000. The remaining gain is included in taxable total profits.

  1. A£140,000
  2. B£90,000Correct
  3. C£50,000
  4. D£0

Explanation

Brought forward capital losses are set against the first available chargeable gains of the company, with no restriction for an annual exempt amount because companies do not have one. Net gain = £140,000 - £50,000 = £90,000. £140,000 ignores the loss relief.

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