ACCA AS Taxation (UK)

Question 1

For income tax purposes, a UK resident individual is taxed on:

Accepted Answer

Worldwide income

Answer

UK resident individuals are subject to UK income tax on their worldwide income, regardless of where it arises, unless specific treaty provisions apply.

Question 2

The personal allowance for income tax (standard amount) reduces by £1 for every £2 of adjusted net income above:

Accepted Answer

£100,000

Answer

The personal allowance is tapered by £1 for every £2 by which adjusted net income exceeds £100,000, meaning it is fully withdrawn at adjusted net income of £125,140.

Question 3

Capital gains tax (CGT) for a higher-rate taxpayer on the disposal of a residential property (above the annual exempt amount) is charged at:

Accepted Answer

24%

Answer

From April 2024, the CGT rate on residential property gains for higher-rate taxpayers is 24% (reduced from 28%). Basic-rate taxpayers pay 18%.

Question 4

Which of the following is deductible when calculating trading profits for income tax?

Accepted Answer

Bad debt specifically written off

Answer

Bad debts specifically written off against specific debts are an allowable deduction for trading income. Depreciation and capital expenditure are replaced by capital allowances; entertaining is disallowable.

Question 5

Annual investment allowance (AIA) provides:

Accepted Answer

100% first-year relief on qualifying plant and machinery expenditure up to the AIA limit

Answer

AIA gives 100% tax relief in the year of purchase for qualifying plant and machinery up to the annual limit (£1 million from Jan 2019). It is available to individuals and companies.

ACCA Applied Skills Practice Test

ACCA Applied Skills Practice Test

ACCA AS Taxation (UK)