AAT L4 Personal Tax (UK Income Tax) 4

Question 1

Capital gains tax (CGT) for basic rate taxpayers on gains from the disposal of assets other than residential property in 2024/25 is charged at:

Accepted Answer

10%

Answer

From 30 October 2024, the CGT rates for non-property assets are 18% (basic rate) and 24% (higher/additional rate) — replacing the previous 10%/20% rates. However, at the time of the question context, 10% basic rate was being phased from 18% to the new rate. Note: from October 2024 Budget, basic rate is 18%.

Question 2

Business Asset Disposal Relief (BADR) applies a CGT rate of 10% on qualifying gains up to a lifetime limit of:

Accepted Answer

£1,000,000

Answer

BADR (formerly Entrepreneurs' Relief) provides a 10% CGT rate on qualifying gains from disposing of all or part of a business, business assets, or shares in a qualifying trading company — subject to a £1 million lifetime limit.

Question 3

For CGT, the annual exempt amount for individuals in 2024/25 is:

Accepted Answer

£3,000

Answer

The CGT annual exempt amount has been progressively reduced: £12,300 (2022/23), £6,000 (2023/24), and £3,000 from 2024/25 — significantly reducing the tax-free allowance for individuals.

Question 4

For UK income tax, benefits in kind for employees are reported on:

Accepted Answer

Form P11D submitted by the employer to HMRC by 6 July following the tax year

Answer

Employers must report taxable benefits in kind on forms P11D (or through payrolling benefits) and submit them to HMRC by 6 July following the end of the tax year. The employee also declares them on self-assessment.

Question 5

A sole trader's trading losses can be relieved against:

Accepted Answer

Total income of the current year and/or previous year, or carried forward against future trading profits

Answer

Under ITA 2007, trading losses can be set against total income of the current year and/or the previous year; alternatively, early-year losses have special rules allowing carry-back; or losses can be carried forward against future trading profits.

AAT Level 4 Practice Test

AAT Level 4 Practice Test

AAT L4 Personal Tax (UK Income Tax) 4