• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

the rates of tax

J

Jiang Kaijie

Member
"for individuals, the amount chargeable to capital gain tax could be added on to the income liable tax and charged to CGT at the individual's marginal tax rate. In the UK, a rate of 10% or 20% has applied to capital gains above the allowance, depending on the level of taxable income."


question(true or false)
chargeable gains made by individual are taxed at their marginal tax rate.

Answer is false.

why is it false? could you please explain what the meaning of the first sentence in the text is in other words?
 
I think the issue here is the difference between the generic core reading sentence and the UK situation. The core reading states generically
for individuals, the amount chargeable to capital gain tax could be added on to the income liable tax and charged to CGT at the individual's marginal tax rate
This is true in some countries, and used to be true in the UK. If you paid a marginal rate of income tax of (say) 45% and you made a chargeable gain, then you paid 45% on that chargeable gain.
In the UK now it is NOT the marginal rate that applies. The rates are 10% and 20% (where income tax rates are 20%, 40% and 45%). This is what the second core reading sentence refers to.
The question then asks whether gains are taxed at marginal rates, but doesnt specifically state whether the question refers to the UK or not. It should really state that that it is referring the the UK as the other parts of the question also refer to the UK situation. But the answer is false because it is referring to the UK and in the UK it is 10% and 20% rather than marginal rates.
 
Back
Top