Calculate Capital Gains Tax Payable by UK Taxpayers
Disposal proceeds, allowable costs, part disposals, shares, losses, exemptions, reliefs and current Capital Gains Tax calculation.
How to study AAT Level 4
Build dependable evidence and models, apply current accounting or legal rules, challenge assumptions and communicate a recommendation suitable for senior finance work.
Core concepts
Concept 1
A gain or loss is calculated for each disposal using consideration and allowable capital costs before annual and other current rules are applied.
Exam cue: Build an acquisition-to-disposal timeline and identify market-value or special matching rules.
Concept 2
Connected parties, gifts, part disposals, share pools and non-arm's-length transactions may change the deemed proceeds or allowable-cost method.
Exam cue: Calculate each gain or loss before aggregating and applying current exemptions or reliefs.
Concept 3
Losses, exemptions, reliefs, income bands and asset type affect the final tax payable and its timing.
Exam cue: Use current assessment tables for rates and explain how taxable income affects the CGT bands.
Risk pitfalls and guardrails
Using cash received as proceeds when a market-value rule applies.
Guardrail: Do not rely on a familiar formula, tax rate, legal rule or policy until you confirm the period, entity, source data and current technical scope.
Deducting ordinary ownership costs that are not allowable capital expenditure.
Guardrail: Do not rely on a familiar formula, tax rate, legal rule or policy until you confirm the period, entity, source data and current technical scope.
Applying the annual exempt amount before offsetting current-year losses under the required ordering.
Guardrail: Do not rely on a familiar formula, tax rate, legal rule or policy until you confirm the period, entity, source data and current technical scope.
Memory anchors
Disposal
A disposal can arise from sale, gift, exchange or another event treated as disposing of an asset.
Allowable Capital Cost
Qualifying acquisition, enhancement and disposal costs reduce the gain.
Market Value
Market value replaces actual proceeds in specified non-arm's-length or gift situations.
Capital Loss
Allowable capital losses reduce gains under the current ordering and claim rules.
CGT Liability
Taxable gains are charged using current rates after losses, exemptions and reliefs.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
An individual sells an asset for £72,000 that cost £45,000, with no costs or reliefs. What gain arises?
Sale proceeds are £110,000, cost £70,000 and allowable buying and selling costs £6,000. What gain arises?
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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