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ACCA Strategic Professional · Advanced Taxation (UK) · Capital gains tax: the scope of the taxation of capital gains

Which statement about the annual exempt amount for an individual in the ATX-UK tax tables is correct?

The annual exempt amount is £3,000 for the tax year and is deducted from an individual's net gains before CGT rates are applied. It is not a deduction from tax, and any unused amount cannot be carried forward.

  1. AIt is £3,000 for the tax year and is set against gains before the rate of CGT is appliedCorrect
  2. BIt is £12,300 and may be carried forward if unused
  3. CIt is £6,000 and is available only to higher rate taxpayers
  4. DIt is £3,000 and is deducted from the tax liability rather than from gains

Explanation

The tables give an annual exempt amount of £3,000. It is deducted from net chargeable gains, not from the tax, and any unused amount is lost rather than carried forward.

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