Chapter 11 Capital Gains Tax – Individuals TX-UK FA2023
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Order of deduction: Annual Exempt Amount (6000 GBP), then Loss from This Year, Loss from Previous Years carried forward
Based on the notes and Example 6, order of deduction is: Current capital loss in the tax year, annual exempt amount and then the capital loss brought forward.
MCQ2 solution is wrong, and the explanation makes it even more confusing. Right answers are A & D.
Hello, thanks for the detailed explanation. However, please
can you explain why part 5 MCQ 2 option C is wrong. I thought we’re to deduct the current year loss from current year gain before deducting the AEA
Okay, i get it now. i misinterpreted the question.
Please can you explain?
I don’t get it
Current year capital losses are offset against current year capital gains which equals net capital gains then the Annual Exempt Amount is deducted to equal Taxable Gains
Hi! I also have doubt on this MCQ2, my answer is A and D because B is obviously wrong because of “against current year income” and C is also wrong, we need to deduct the current year loss from current year gain before deducting AEA(as you also said). That’s why I had to check the answers in the Notes and the answer there is A&D. Hope this help
In part 2 you had the computation for gift aid payment as pension. Is the computation the same of the two the same and this was an error in writing or are the computed differently in that you must find the gross for pension payments and use the figure given for the gift aid payment? Can you clarify please. Thank you in advance
I think it might be an error in writing, it should be gross gift aid payment. The confusion might have occurred as both gross personal pension payments and gross gift aid payments extend the rate bands
Once the question states made gift aid payment it is assumed that this is the net figure and the gross figure should be calculated to be used in the computation i.e., net figure x 100/80. Otherwise the question will state when it is a gross figure.