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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

Under the ATX-UK tax rates for Finance Act 2025, which statement correctly describes the lifetime limits and rate for business asset disposal relief (BADR) and investors' relief?

Both business asset disposal relief and investors' relief have a £1,000,000 lifetime limit, and qualifying gains within the limit are taxed at 14%. The tax tables for the June 2026 to June 2027 ATX-UK exams show these figures, so the other limits and rates are wrong.

  1. ABADR has a £1,000,000 lifetime limit, investors' relief has a £10,000,000 limit, both taxed at 10%
  2. BBoth BADR and investors' relief have a £1,000,000 lifetime limit, with gains taxed at 14%Correct
  3. CBoth reliefs have a £1,000,000 lifetime limit, with gains taxed at 18%
  4. DBADR has a £1,000,000 lifetime limit taxed at 14%, while investors' relief gains are taxed at 24%

Explanation

The ATX-UK tax tables give a £1,000,000 lifetime limit for each of BADR and investors' relief, and a single rate of 14% for qualifying gains. The other options use outdated limits or rates not shown in the tables.

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