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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the basic principles of computing gains and losses

Under the ATX-UK tax tables, which statement about business asset disposal relief is correct?

Business asset disposal relief taxes qualifying gains at 14%, subject to a lifetime limit of £1,000,000. The 18% and 24% rates apply to other gains, and £325,000 is the inheritance tax nil rate band rather than a CGT limit.

  1. AThe rate of tax is 18% on qualifying gains up to a lifetime limit of £1,000,000
  2. BThe rate of tax is 14% on qualifying gains up to a lifetime limit of £1,000,000Correct
  3. CThe rate of tax is 10% on qualifying gains up to a lifetime limit of £1,000,000
  4. DThe rate of tax is 14% on qualifying gains up to a lifetime limit of £325,000

Explanation

The tables show a lifetime limit of £1,000,000 for business asset disposal relief and a rate of 14%. 10% is an earlier rate. £325,000 is the inheritance tax nil rate band, not the CGT relief limit. 18% is the normal lower CGT rate.

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