June 2023 to March 2024 exams Watch free ACCA TX lectures
Answer to Example 3 Kathy Provided an election is made, the whole of the trading loss remaining after the claim against total
income has been made will be available to be o
ff
set against the net gains of 2022/23. The entire
£24,000 of loss is available for set o
ff
against the net gains as it is less than the maximum loss of
£40,000, computed as net gains less capital losses brought forward (44,000 - 4,000). The loss of
£24,000 is then applied against the net gains of the tax year before the deduction of any capital loss
b/f and before the deduction of the annual exempt amount.
Answer to Example 4 Trading income assessable amounts:
When calculating the amount assessable for 2022/23, the loss already taken into account in 2021/22
must be deducted.
The loss of £4,000 allocated to 2022/23 is then used in aggregation against the profit of £8,000
creating a net assessment of £4,000. No further relief is therefore available for this part of the loss.
The taxpayer would then need to choose his preferred use of the £16,000 loss in respect of 2021/22.
A loss may only be relieved once hence there is no concept of “overlap loss”.
As a profit of £8,000 (2/12 x 48,000) has been included in computing the assessments in both
2022/23 and 2023/24 this will represent an overlap profit that will reduce the assessment of the
taxpayer in their final tax year of assessment.
£ Capital gains
44,000
Loss relief
(24,000)
20,000
Less: AEA
(12,300)
Capital loss b/f
(4,000)
Taxable gains for 2022/23
3,700
Assessment Loss 2021/22 (Actual basis)
1/08/2021 – 5/04/2022 (8/10
×
(20,000))
Nil
(16,000)
2022/23 (First 12 months)
1/08/2021 – 31/07/2022
Loss to 31/05/2022
(20,000)
Less: Used in 2021/22
16,000
(4,000)
Profits 2/12
×
48,000
8,000
4,000
2023/24 (CYB)
Year ended 31/05/2023
48,000
238
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