AAT L4 Personal Tax — Questions and Answers
Question 1: For 2025/26, what is the personal allowance for a UK individual with total income of £80,000?
- £12,570 (Correct answer)
- £10,000
- £0
- £6,285
Correct answer: £12,570
The personal allowance for 2025/26 is £12,570. It is reduced by £1 for every £2 of adjusted net income above £100,000. Since income of £80,000 is below £100,000, the full allowance applies.
Question 2: A UK taxpayer has employment income of £60,000 and receives bank interest of £500. How much of the bank interest is tax-free under the Personal Savings Allowance?
- £0
- £500 (Correct answer)
- £1,000
- £250
Correct answer: £500
A higher rate taxpayer (income between £50,271 and £125,140) receives a Personal Savings Allowance of £500. Since the bank interest is exactly £500, the entire amount is covered by the PSA and is tax-free.
Question 3: An employee receives a company car with a list price of £30,000 and CO2 emissions of 120 g/km. The appropriate percentage is 30%. What is the annual car benefit charge?
- £9,000 (Correct answer)
- £3,600
- £6,000
- £12,000
Correct answer: £9,000
Car benefit = List price x Appropriate percentage = £30,000 x 30% = £9,000. This amount is added to the employee's taxable income.
Question 4: Which of the following is exempt from Income Tax for a UK employee?
- Annual bonus payment
- Employer's contribution to a registered pension scheme (Correct answer)
- Company car fuel benefit
- Christmas cash gift from employer
Correct answer: Employer's contribution to a registered pension scheme
Employer contributions to a registered pension scheme are exempt from Income Tax for the employee. The contribution is an allowable expense for the employer. Bonuses, fuel benefits, and cash gifts are all taxable.
Question 5: A taxpayer sells a residential property (not their main residence) in August 2025. By when must they report and pay Capital Gains Tax to HMRC?
- 31 January following the end of the tax year
- Within 60 days of completion (Correct answer)
- Within 30 days of completion
- By the next quarterly VAT return date
Correct answer: Within 60 days of completion
UK residents must report and pay CGT on residential property disposals within 60 days of completion. This applies to properties that are not the individual's main residence.
Question 6: For 2025/26, the Capital Gains Tax annual exempt amount for an individual is:
- £12,300
- £6,000
- £3,000 (Correct answer)
- £1,000
Correct answer: £3,000
The CGT annual exempt amount was reduced to £3,000 from 6 April 2024. Only the first £3,000 of net gains in a tax year are exempt from CGT.
AAT L4 Personal Tax
For 2025/26, what is the personal allowance for a UK individual with total income of £80,000?