ACCA SP Advanced Taxation (UK)

Question 1

Under UK corporate tax rules, the participation exemption (substantial shareholding exemption, SSE) applies when:

Accepted Answer

A company sells shares in a trading company in which it has held at least 10% for 12 consecutive months within the preceding six years

Answer

A company sells any shares at a profit

Answer

A company receives dividends from an overseas subsidiary

Answer

A company claims group loss relief

Question 2

In the context of UK income tax, which of the following is subject to the 'high income child benefit charge'?

Accepted Answer

Individuals with adjusted net income over £60,000 who or whose partner claims child benefit

Answer

All parents regardless of income

Answer

Only employees earning above £100,000

Answer

Only those with investment income above £50,000

Question 3

Which of the following correctly describes UK 'entrepreneurs' relief' (now Business Asset Disposal Relief, BADR)?

Accepted Answer

A 10% CGT rate on qualifying business asset gains up to a lifetime limit of £1 million

Answer

A 10% CGT rate on all business disposals without limit

Answer

An exemption from CGT for all small business sales

Answer

A 20% flat rate on disposals of shares in quoted companies

Question 4

Under the UK controlled foreign company (CFC) rules, a charge arises when:

Accepted Answer

A UK resident company controls an overseas company that pays tax at a low rate and has UK-source profits diverted to it

Answer

A UK company imports goods from an overseas subsidiary

Answer

A UK company has a branch in a tax haven

Answer

A UK company receives dividends from any overseas company

Question 5

Which of the following is a feature of the UK's 'patent box' regime?

Accepted Answer

Profits derived from patented inventions are taxed at a reduced 10% corporation tax rate

Answer

All R&D expenditure is deducted at 230%

Answer

Capital gains on patent disposals are exempt

Answer

Patents are amortised over 25 years for tax purposes

Question 6

The 'general anti-abuse rule' (GAAR) in UK tax law:

Accepted Answer

Counteracts arrangements that are abusive (giving a tax advantage not consistent with Parliament's intention) but does not affect genuine commercial planning

Answer

Prohibits all tax planning

Answer

Applies only to VAT avoidance

Answer

Is only enforceable by criminal prosecution