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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 lifetime limits for Business Asset Disposal Relief (BADR) and Investors' Relief (IR) in the ATX-UK tax tables is correct?

Each relief has its own £1,000,000 lifetime limit, and qualifying gains under both are taxed at 14%. The limits are not shared, so using one relief does not reduce the other.

  1. ABADR and IR each have a separate lifetime limit of £1,000,000, taxed at 14%Correct
  2. BBADR has a £1,000,000 lifetime limit but IR has a £10,000,000 limit
  3. CBADR and IR share a single combined lifetime limit of £1,000,000
  4. DBADR is taxed at 14% but IR is taxed at 10%

Explanation

The tax tables show a lifetime limit of £1,000,000 for BADR and £1,000,000 for investors' relief, with a rate of 14%. Each relief has its own limit, so they are not combined. The other options give wrong limits or rates.

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