ACCA Taxation (F6) Practice Exam

What are UK residents liable to pay capital gains tax on?

1. The disposal of chargeable assets in the UK only

2. The disposal of chargeable assets worldwide

3. Only on properties within the UK

4. Only on sales exceeding £50,000

The correct answer is: The disposal of chargeable assets worldwide

UK residents are liable to pay capital gains tax on the disposal of chargeable assets worldwide. This means that any gains realized from the sale of assets, regardless of where those assets are situated, will be subject to capital gains tax. This principle aligns with the UK's tax regulations, which consider residency status as a key factor in determining tax obligations. Thus, a UK resident who sells an asset located outside the UK will still be liable for capital gains tax if that sale results in a gain. In contrast, the other options incorrectly limit the scope of capital gains tax liability. For instance, only considering disposals within the UK would ignore potential gains made from overseas assets. Similarly, restricting liability to specific types of properties or imposing a threshold on sales undermines the comprehensive nature of the capital gains tax system, which applies uniformly to all chargeable assets owned by UK residents.