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ACCA Applied Skills · Taxation (UK) · Chargeable gains for companies

Which of the following is a correct statement about the computation of a company's chargeable gain on a disposal?

Companies pay corporation tax on chargeable gains as part of taxable total profits. The capital gains tax rates, the £3,000 annual exempt amount and business asset disposal relief in the tax tables are available only to individuals, not companies.

  1. ACompanies pay corporation tax on chargeable gains as part of taxable total profitsCorrect
  2. BCompanies deduct the individual annual exempt amount of £3,000 from gains
  3. CCompanies pay capital gains tax at 24% on gains
  4. DCompanies may use business asset disposal relief at 14% on gains

Explanation

A company's chargeable gains are included in profits chargeable to corporation tax. The £3,000 annual exempt amount, the CGT rates of 18% and 24% and business asset disposal relief at 14% apply only to individuals.

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