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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: gains and losses on the disposal of movable and immovable property

Which statement about how BADR and investors' relief limits operate is correct?

Each relief has a £1,000,000 lifetime limit, so qualifying gains in earlier years reduce the amount remaining. The limits do not renew each year, and they are separate for BADR and investors' relief, both taxed at 14%.

  1. AThe £1,000,000 limit for each relief is a lifetime limit, so gains eligible for relief in earlier years reduce what remains availableCorrect
  2. BThe £1,000,000 limit for each relief is renewed every tax year
  3. CInvestors' relief gains are taxed at 18% or 24% but the lifetime limit is £10,000,000
  4. DInvestors' relief uses up the BADR limit first, because the two reliefs share one limit

Explanation

The tables describe the figures as lifetime limits. Earlier gains that qualified use up the limit and it does not renew annually. The limits are separate for each relief and the rate is 14%.

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