ATT Personal Tax (Paper 1) Questions and
Verified Answers
Question 1
the situation where class 1A NICs are payable on termination payments
Correct Answer
the taxable benefits an employee would have earned had they worked for the
duration of their notice period, + any additional amounts over £30,000 is subject to
class 1A NICs
Question 2
property income:
FHL advantages
Correct Answer
- full mortgage interest deductible
- profits treated as earned income (useful for pension contributions)
- capital gain reliefs available (gift relief, BADR)
Question 3
property income:
long term lease premium received
Correct Answer
fully chargeable to capital gains
Question 4
share and cryptocurrency matching rules
Correct Answer
1st - same day acquisitions
2nd - following 30 days acquisitions
3rd - s.104 pool
Page 1 of 126
,Question 5
chargeable life insurance cash in
Correct Answer
gain on single premium investments
Question 6
minimum and maximum penalty for:
careless, prompted disclosure
Correct Answer
<12m 10% of potential lost revenue
>12m 20% of potential lost revenue
max 30% of potential lost revenue
Question 7
Double tax relief amount
Correct Answer
Lower of:
- overseas tax suffered
- uk tax liability on foreign income
(uk tax liability on foreign income is the difference between what the tax liability
would have been without the foreign income and what the tax liability would be
with the foreign income as the top slice)
Question 8
Maximum pension contribution per year
Correct Answer
anyone can pay £6,600, otherwise;
100% of relevant earnings
Page 2 of 126
,Question 9
capital losses which can be offset against net income (not just capital gains)
Correct Answer
qualifying trading company shares ie:
EIS
SEIS
Question 10
EIS maximum amount eligible for tax relief
Correct Answer
£1m or £2m for knowledge intensive company
Question 11
money purchase pension plan
Correct Answer
- mostly personal pension but can also be occupational.
- individual contributes 80% and HMRC make up to 100%.
- relief obtained by increasing tax bands by grossed up contributions.
Question 12
income tax and CGT record keeping
Correct Answer
first anniversary following 31st Jan
Question 13
CGT
takeovers:
wholly in cash exchange implications on taxpayer
Correct Answer
normal share matching rules
Page 3 of 126
, Question 14
UK residents worldwide income general tax rule
Correct Answer
worldwide income & capital gains taxable in the UK
Question 15
Marriage Allowance
Correct Answer
10% of personal allowance can be transferred to give a tax reducer of 20% of the
transferred amount.
e.g
personal allowance £12,570
Transferred amount £1,260 (rounded up to nearest 10)
Tax reducer £252
Transferer's remaining PA !11,310
Question 16
additional penalty for tax returns more than 6 months late
Correct Answer
greater of:
5% of tax liability
£300
Question 17
cgt calculation on premium received for grant of a short term lease
Correct Answer
capital element of premium =
premium received - (premium received X ((50-y-1)/50))
Less: allowable cost =
freeholder cost x gross capital element of premium received
-----------------------------------------------
(premium received + reversionary interest)
Page 4 of 126
Verified Answers
Question 1
the situation where class 1A NICs are payable on termination payments
Correct Answer
the taxable benefits an employee would have earned had they worked for the
duration of their notice period, + any additional amounts over £30,000 is subject to
class 1A NICs
Question 2
property income:
FHL advantages
Correct Answer
- full mortgage interest deductible
- profits treated as earned income (useful for pension contributions)
- capital gain reliefs available (gift relief, BADR)
Question 3
property income:
long term lease premium received
Correct Answer
fully chargeable to capital gains
Question 4
share and cryptocurrency matching rules
Correct Answer
1st - same day acquisitions
2nd - following 30 days acquisitions
3rd - s.104 pool
Page 1 of 126
,Question 5
chargeable life insurance cash in
Correct Answer
gain on single premium investments
Question 6
minimum and maximum penalty for:
careless, prompted disclosure
Correct Answer
<12m 10% of potential lost revenue
>12m 20% of potential lost revenue
max 30% of potential lost revenue
Question 7
Double tax relief amount
Correct Answer
Lower of:
- overseas tax suffered
- uk tax liability on foreign income
(uk tax liability on foreign income is the difference between what the tax liability
would have been without the foreign income and what the tax liability would be
with the foreign income as the top slice)
Question 8
Maximum pension contribution per year
Correct Answer
anyone can pay £6,600, otherwise;
100% of relevant earnings
Page 2 of 126
,Question 9
capital losses which can be offset against net income (not just capital gains)
Correct Answer
qualifying trading company shares ie:
EIS
SEIS
Question 10
EIS maximum amount eligible for tax relief
Correct Answer
£1m or £2m for knowledge intensive company
Question 11
money purchase pension plan
Correct Answer
- mostly personal pension but can also be occupational.
- individual contributes 80% and HMRC make up to 100%.
- relief obtained by increasing tax bands by grossed up contributions.
Question 12
income tax and CGT record keeping
Correct Answer
first anniversary following 31st Jan
Question 13
CGT
takeovers:
wholly in cash exchange implications on taxpayer
Correct Answer
normal share matching rules
Page 3 of 126
, Question 14
UK residents worldwide income general tax rule
Correct Answer
worldwide income & capital gains taxable in the UK
Question 15
Marriage Allowance
Correct Answer
10% of personal allowance can be transferred to give a tax reducer of 20% of the
transferred amount.
e.g
personal allowance £12,570
Transferred amount £1,260 (rounded up to nearest 10)
Tax reducer £252
Transferer's remaining PA !11,310
Question 16
additional penalty for tax returns more than 6 months late
Correct Answer
greater of:
5% of tax liability
£300
Question 17
cgt calculation on premium received for grant of a short term lease
Correct Answer
capital element of premium =
premium received - (premium received X ((50-y-1)/50))
Less: allowable cost =
freeholder cost x gross capital element of premium received
-----------------------------------------------
(premium received + reversionary interest)
Page 4 of 126
