ACCA SP Advanced Taxation (ATX-UK)

Question 1

A UK sole trader has been trading for several years and is considering incorporating the business.
Which of the following Capital Gains Tax (CGT) reliefs is specifically designed to defer gains arising on the transfer of a business to a company?

Accepted Answer

Incorporation relief under s.162 TCGA 1992

Answer

Entrepreneurs' relief (Business Asset Disposal Relief)

Answer

Rollover relief on replacement of business assets

Answer

Holdover relief for gifts of business assets

Question 2

For the 2025/26 tax year, an individual makes a chargeable gain of £40,000 on the disposal of a residential property that has never been their main residence. After deducting the annual exempt amount of £3,000, what rate(s) of CGT apply if they are a higher rate taxpayer?

Accepted Answer

24% on the entire net gain

Answer

20% on the entire net gain

Answer

10% on the first £37,700, 20% on the remainder

Answer

28% on gains up to April 2024, 24% on gains thereafter

Question 3

A UK company has a 31 March year end and makes a trading loss of £500,000 in the year ended 31 March 2026. Which of the following loss relief claims can the company make under Corporation Tax rules?

Accepted Answer

Offset against total profits of the current period and/or carry back 1 year against total profits, then carry forward against future total profits

Answer

Carry the loss back 3 years and offset against total profits

Answer

Carry the loss forward indefinitely against future trading profits only

Answer

Offset against total profits of the current period only, with no carry back or forward

Question 4

An individual dies on 15 January 2026 with an estate valued at £625,000. They had made no lifetime transfers. The estate includes a family home worth £350,000 left to their child. What is the Inheritance Tax (IHT) liability on the estate?

Accepted Answer

£50,000

Answer

£30,000

Answer

£20,000

Answer

£60,000

Question 5

A UK VAT-registered trader supplies both standard-rated and exempt supplies. In a VAT quarter, the trader incurs £30,000 of input VAT, of which £10,000 relates to taxable supplies, £12,000 relates to exempt supplies, and £8,000 is unattributed. Using the partial exemption standard method, how much input VAT can the trader recover?

Accepted Answer

£15,200

Answer

£10,000

Answer

£18,000

Answer

£14,400

Question 6

An individual is considering making a claim for Enterprise Investment Scheme (EIS) income tax relief. Which of the following is a condition that must be met?

Accepted Answer

The investor must not be connected with the company, and shares must be held for at least 3 years to retain the relief

Answer

The investor must hold the shares for a minimum of 5 years

Answer

The company must be listed on the London Stock Exchange

Answer

The maximum investment qualifying for relief is £500,000 per tax year