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ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets

Which ONE of the following statements about investors' relief is correct for 2025/26?

Investors' relief applies to shares in an unquoted trading company that the investor subscribed for, subject to a £1,000,000 lifetime limit, with qualifying gains taxed at 14%. Purchased shares, short holdings and the other limits suggested do not match the rules.

  1. AIt applies to shares in an unquoted trading company subscribed for by the investor, with a £1,000,000 lifetime limit and a 14% rateCorrect
  2. BIt applies to any shares held for one year, with a 24% rate
  3. CIt is available to employees who acquire shares by purchase from a director
  4. DIt has a lifetime limit of £10,000,000 and a 14% rate

Explanation

Investors' relief covers newly subscribed shares in unquoted trading companies, taxed at 14% with a £1,000,000 lifetime limit. The other options misstate the limit, rate, holding or acquisition method.

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