AAT Level 4 - Professional Diploma in Accounting Personal Tax Computations Questions and Answers

Question 1

For the tax year 2024/25, Aisha has an adjusted net income of £115,000. What is her Personal Allowance for the year?

Accepted Answer

£5,070

Answer

£12,570

Answer

£0

Answer

£7,500

Question 2

David, a higher-rate taxpayer in England, makes a gross personal pension contribution of £10,000 into his 'relief at source' scheme during the 2024/25 tax year. How does this contribution affect his income tax bands?

Accepted Answer

His basic rate and higher rate bands are both extended by £10,000.

Answer

His basic rate band is extended to £47,700, but his higher rate band is unchanged.

Answer

He receives no extension to his tax bands as relief is given at source.

Answer

His basic rate band is extended to £37,700 and his higher rate band is extended to £135,140.

Question 3

In September 2024, Fatima sold a residential property for £300,000 which she had originally purchased for £200,000. She incurred legal fees of £3,000 on the purchase and £5,000 on the sale. For the 2024/25 tax year, Fatima is a higher-rate taxpayer with sufficient income to use her basic rate band. What is her Capital Gains Tax (CGT) liability on this disposal?

Accepted Answer

£21,360

Answer

£22,080

Answer

£16,560

Answer

£23,280

Question 4

Which of the following statements regarding National Insurance Contributions (NICs) for the 2024/25 tax year is correct?

Accepted Answer

An employee earning between the Lower Earnings Limit and the Primary Threshold pays 0% NICs but is credited as if they have paid.

Answer

Self-employed individuals with profits above the Lower Profits Limit must pay both Class 2 and Class 4 NICs.

Answer

Employers pay secondary Class 1 NICs at a rate of 13.8% on all earnings paid to an employee.

Answer

Class 3 NICs are mandatory for individuals who have gaps in their contribution record.

Question 5

Brian is a basic-rate taxpayer living in Wales. For the 2024/25 tax year, he has the following income: Employment Income: £35,000, Bank Interest: £1,200, Dividends: £800. What is his total income tax liability?

Accepted Answer

£4,146.00

Answer

£4,586.00

Answer

£4,546.00

Answer

£4,171.75

Question 6

Which of these costs incurred by a landlord of a residential property is NOT an allowable expense deductible from rental income for tax purposes?

Accepted Answer

The legal fees for arranging the initial purchase of the property.

Answer

Letting agent fees for finding a new tenant.

Answer

The cost of a like-for-like replacement of a broken boiler.

Answer

Landlord's building insurance premiums.