Taxation (UK) Flashcards
6 cards from real ACCA AS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Taxation (UK) flashcards as text
For income tax purposes, a UK resident individual is taxed on:
Answer: Worldwide income
UK resident individuals are subject to UK income tax on their worldwide income, regardless of where it arises, unless specific treaty provisions apply.
The personal allowance for income tax (standard amount) reduces by £1 for every £2 of adjusted net income above:
Answer: £100,000
The personal allowance is tapered by £1 for every £2 by which adjusted net income exceeds £100,000, meaning it is fully withdrawn at adjusted net income of £125,140.
Capital gains tax (CGT) for a higher-rate taxpayer on the disposal of a residential property (above the annual exempt amount) is charged at:
Answer: 24%
From April 2024, the CGT rate on residential property gains for higher-rate taxpayers is 24% (reduced from 28%). Basic-rate taxpayers pay 18%.
Which of the following is deductible when calculating trading profits for income tax?
Answer: Bad debt specifically written off
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.
Annual investment allowance (AIA) provides:
Answer: 100% first-year relief on qualifying plant and machinery expenditure up to the AIA limit
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.
National Insurance Contributions (NICs) Class 1 employee contributions are paid on:
Answer: Employment income (earnings) above the primary threshold
Class 1 employee NICs are charged on employment earnings (salary, wages, bonuses) above the Primary Threshold. Investment income and self-employment income are not subject to Class 1.