ACCA Taxation (F6) Practice Exam

What is the rate of capital gains tax for business asset disposal relief?

1. 5%

2. 15%

3. 20%

4. 10%

The correct answer is: 10%

The rate of capital gains tax for business asset disposal relief is indeed set at 10%. This relief is available to individuals disposing of certain business assets, allowing them to pay a reduced rate of capital gains tax on qualifying gains. The conditions for obtaining this relief typically include a minimum period of ownership and the nature of the assets involved, such as shares in a trading company or sold business assets. This 10% rate provides significant tax relief compared to the standard higher rates of capital gains tax, which can go up to 20% for higher-rate taxpayers. Additionally, business asset disposal relief is designed to encourage investment in businesses and support those who are selling small enterprises or shares in qualifying trading firms.