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ACCA Strategic Professional · Advanced Taxation (UK) · Tax advantages and disadvantages of alternative courses of action

Which statement correctly describes the capital gains tax (CGT) rates and annual exempt amount for individuals in the tax rates provided for ATX-UK (Finance Act 2025)?

For individuals, CGT is charged at 18% (lower rate) and 24% (higher rate), and the annual exempt amount is £3,000. The rate applied depends on how much of the basic rate band is available after taxable income. Older rates and amounts are no longer used.

  1. ARates of 10% and 20%, with an annual exempt amount of £12,300
  2. BRates of 18% and 24%, with an annual exempt amount of £3,000Correct
  3. CRates of 18% and 28%, with an annual exempt amount of £6,000
  4. DA single rate of 24%, with an annual exempt amount of £3,000

Explanation

The tax rates provided show a lower rate of 18%, a higher rate of 24% and an annual exempt amount of £3,000. The other options use superseded figures or ignore the two-rate structure.

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