How Do You Answer Capital Gains Tax Questions in ACCA TX?
CGT questions in ACCA TX reward a methodical computation and the right reliefs. Here's the standard layout, the reliefs to watch for, and why showing your workings protects your marks.
Capital gains tax is a reliable, method-driven topic in ACCA TX. A CGT question typically gives you a set of disposals and asks you to compute the taxable gains and the tax due. Because it follows a standard layout, it's one of the most learnable parts of the paper — but marks are lost on missed reliefs, the wrong annual exempt amount, and hidden workings. Note that specific rates and allowances are set by the examinable Finance Act and change, so always work from the version examined in your sitting.
Use the standard computation layout
Set every disposal out the same way: proceeds (or market value for a gift or connected-party disposal), less costs of disposal, less the original cost and any enhancement expenditure, to give the gain. Aggregate the gains, deduct allowable losses and the annual exempt amount, then apply the appropriate rates. A clear, consistent layout earns method marks and prevents errors.
Rule 1: Get proceeds and cost right
Watch how the disposal happens. A gift or a sale to a connected person uses market value, not the actual proceeds. Part disposals need the cost apportioned using the standard fraction. Enhancement expenditure is allowable, but repairs and revenue costs are not. These distinctions are common, deliberate marks.
Rule 2: Apply the reliefs the scenario signals
CGT reliefs are where higher marks sit, and the scenario always hints at which apply — business asset disposal relief on the sale of a qualifying business, rollover relief where proceeds are reinvested in new business assets, gift holdover relief on qualifying gifts, and private residence relief on a main home. Identifying the right relief and applying its conditions is often the difference between a pass and a fail.
Rule 3: Use losses and the exemption in the right order
Current-year losses are set against gains before the annual exempt amount; brought-forward losses are used only to reduce gains down to the annual exempt amount, not below it, so the exemption isn't wasted. Getting this ordering wrong is a frequent, avoidable slip.
Rule 4: Show every working
TX is generous with method and own-figure marks, but only if the marker can see your steps. A single final tax figure with no computation throws away the marks that flow from a correct method even when a number is wrong. Lay each disposal and each relief out in full.
The takeaway
CGT questions reward a methodical computation: standard layout, correct proceeds and cost, the right reliefs applied to their conditions, losses and the exemption used in order, and every step shown. It's bankable marks once the process is second nature.
The difficulty is that a CGT computation looks complete even when a relief was missed or losses were used in the wrong order — the error hides in a plausible-looking answer. The 50% Club marks your practice TX answers against the official ACCA scheme, showing exactly where a relief, an ordering rule or a hidden working cost you a mark.