ACCA Advanced Taxation (ATX) Practice Exam

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Prepare for the ACCA Advanced Taxation Exam. Use interactive flashcards and multiple-choice questions, complete with hints and comprehensive explanations. Ensure your success on exam day!

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True or False: Both individuals and companies have an Annual Exempt Amount (AEA) for capital gains.

  1. True

  2. False

  3. Only individuals have AEA

  4. Only companies have AEA

The correct answer is: False

The statement is false because, in the context of capital gains tax, only individuals and certain trusts are entitled to an Annual Exempt Amount (AEA). Companies do not have an AEA for capital gains; instead, they are fully taxed on their capital gains without an exemption. This means that while individuals can benefit from a portion of their capital gains being exempt from tax due to the AEA, companies do not receive this benefit, leading to a different taxation treatment for capital gains for corporate entities compared to individuals.

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