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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the use of exemptions and reliefs in deferring and minimising tax liabilities

Tomas, a UK resident, has taxable income of £25,270 after the personal allowance for 2026/27. The basic rate band is £37,700. He sells a quoted shareholding and makes a gain of £21,000. He has no losses and no other disposals, and the shares are not eligible for any relief. Using the rates in the ATX-UK tax tables, what is his capital gains tax liability?

This item is flawed because the computed liability does not match the stated answer, so it should not be used.

  1. A£2,616Correct
  2. B£3,240
  3. C£2,160
  4. D£3,780

Explanation

The taxable gain is £21,000 - £3,000 = £18,000. Unused basic rate band is £37,700 - £25,270 = £12,430, taxed at 18% = £2,237.40. The remaining £5,570 is taxed at 24% = £1,336.80. The total is £3,574.20 under these figures, which does not match any option, so the options must be rechecked against the data. Reworking: the intended figures give £12,430 x 18% = £2,237 and £5,570 x 24% = £1,337, a total of £3,574.

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