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ACCA Strategic Professional · Advanced Taxation (UK) · Corporation tax: chargeable gains for companies

Which statement about a company's share pool under the UK rules, in a Finance Act 2025 context, is correct?

A company's chargeable gains on shares are included in taxable total profits and taxed at the applicable corporation tax rate. No annual exempt amount is available, and the capital gains tax rates of 18% and 24% do not apply to companies.

  1. AA company disposing of shares pays capital gains tax at 24% on the gain
  2. BA company's chargeable gains are taxed within corporation tax at the rate applying to its profits, and no annual exempt amount is availableCorrect
  3. CA company is entitled to the £3,000 annual exempt amount against gains on shares
  4. DA company's gains on shares are taxed at 18% if its profits are below £50,000

Explanation

Companies pay corporation tax, not capital gains tax, on chargeable gains, which are included in taxable total profits. The annual exempt amount of £3,000 and the 18% and 24% rates are capital gains tax provisions for individuals and do not apply to companies. The rate is the small profits rate, marginal relief or main rate depending on augmented profits.

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