ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the basic principles of computing gains and losses
Tomas, a higher rate taxpayer, made a single chargeable gain of £23,000 in the tax year and has no losses. Using the ATX-UK tax tables, what is his capital gains tax liability?
Deduct the £3,000 annual exempt amount from the £23,000 gain to leave £20,000, then tax it at the 24% higher rate, giving a capital gains tax liability of £4,800.
- A£4,800Correct
- B£4,140
- C£5,520
- D£4,320
Explanation
Gain £23,000 less annual exempt amount £3,000 = £20,000 taxable. As he is a higher rate taxpayer, all is taxed at 24%: £20,000 x 24% = £4,800. £5,520 ignores the annual exempt amount. £4,140 wrongly uses 18% on the taxable gain... actually £20,000 x 18% = £3,600, so £4,140 is 18% of £23,000. £4,320 is 24% of £18,000, wrongly deducting £5,000.
Did you get it right without looking?
One question tells you little. A timed set on Capital gains tax: the basic principles of computing gains and losses shows your real accuracy, how long you take and where you lose marks.
More Capital gains tax: the basic principles of computing gains and losses questions
- Mei Lin, a UK resident individual, gifts a chargeable asset to her friend. The market value at the date of gift is £90,000, she paid £60,000…
- Grace, a UK resident individual, sold an antique vase (a non-wasting chattel) for £9,000 net of any selling costs. She had bought it for £3,…
- Mehmet, a UK resident higher rate taxpayer, sold a painting in 2025/26 for a gain of £9,000 and sold shares in the same year at a loss of £5…
- For the tax year covered by the Finance Act 2025 tax rates and allowances issued for ATX-UK, which pair of capital gains tax rates applies t…
- Rahul sells his entire unincorporated trading business, which he has run for six years, and the gains qualify for Business Asset Disposal Re…
- Priya, a higher rate taxpayer, has taxable income well above the basic rate band. In the year she sold a painting for a chargeable gain of £…