ATT ADVANCED TAXATION
PROFESSIONAL PRACTICE TEST
QUESTIONS AND ANSWERS
1. For the tax year 2023/24, a taxpayer has an adjusted net income of £118,000. What is their
available Personal Allowance?
A. £3,570
B. £6,285
C. £12,570
D. £0
Answer: A
Conceptual Explanation: The Personal Allowance is reduced by £1 for every £2 that
adjusted net income exceeds £100,000. Calculation: (£118,000 - £100,000) / 2 = £9,000
reduction. £12,570 - £9,000 = £3,570.
2. Under the Gift Aid scheme, if a higher-rate taxpayer (40%) makes a cash donation of £800
to a charity, what is the increase in their basic rate band?
A. £800
,B. £200
C. £1,000
D. £1,200
Answer: C
Conceptual Explanation: The donation is treated as being made net of basic rate tax. The
gross donation is £.80 = £1,000. The basic rate band is extended by the gross
amount of £1,000.
3. An individual disposes of an antique (a tangible movable asset) for £7,500. It originally cost
£4,000. What is the maximum chargeable gain after applying the chattels ‘5/3rds’ rule?
A. £3,500
B. £1,500
C. £2,500
D. £2,100
Answer: C
Conceptual Explanation: For chattels sold for more than £6,000 where cost was less than
£6,000, the gain is the lower of the actual gain (£3,500) or 5/3rds of (Gross Proceeds -
£6,000). 5/3 * (£7,500 - £6,000) = £2,500.
, 4. Which of the following conditions is NOT required for a disposal to qualify for Business
Asset Disposal Relief (BADR)?
A. The individual must own at least 5% of the ordinary share capital.
B. The individual must have held the shares for at least five years.
C. The individual must have been an employee or officer of the company.
D. The company must be a trading company or the holding company of a trading group.
Answer: B
Conceptual Explanation: The minimum holding period for Business Asset Disposal Relief
is two years, not five years.
5. A company changes its accounting date, resulting in an 18-month period of account ending
31 December 2023. How is this period divided for Corporation Tax purposes?
A. One single 18-month accounting period.
B. A 12-month accounting period followed by a 6-month accounting period.
C. Three 6-month accounting periods.
D. A 6-month accounting period followed by a 12-month accounting period.
Answer: B
Conceptual Explanation: An accounting period for Corporation Tax cannot exceed 12
months. Therefore, a long period of account is split into the first 12 months and the
remainder.
PROFESSIONAL PRACTICE TEST
QUESTIONS AND ANSWERS
1. For the tax year 2023/24, a taxpayer has an adjusted net income of £118,000. What is their
available Personal Allowance?
A. £3,570
B. £6,285
C. £12,570
D. £0
Answer: A
Conceptual Explanation: The Personal Allowance is reduced by £1 for every £2 that
adjusted net income exceeds £100,000. Calculation: (£118,000 - £100,000) / 2 = £9,000
reduction. £12,570 - £9,000 = £3,570.
2. Under the Gift Aid scheme, if a higher-rate taxpayer (40%) makes a cash donation of £800
to a charity, what is the increase in their basic rate band?
A. £800
,B. £200
C. £1,000
D. £1,200
Answer: C
Conceptual Explanation: The donation is treated as being made net of basic rate tax. The
gross donation is £.80 = £1,000. The basic rate band is extended by the gross
amount of £1,000.
3. An individual disposes of an antique (a tangible movable asset) for £7,500. It originally cost
£4,000. What is the maximum chargeable gain after applying the chattels ‘5/3rds’ rule?
A. £3,500
B. £1,500
C. £2,500
D. £2,100
Answer: C
Conceptual Explanation: For chattels sold for more than £6,000 where cost was less than
£6,000, the gain is the lower of the actual gain (£3,500) or 5/3rds of (Gross Proceeds -
£6,000). 5/3 * (£7,500 - £6,000) = £2,500.
, 4. Which of the following conditions is NOT required for a disposal to qualify for Business
Asset Disposal Relief (BADR)?
A. The individual must own at least 5% of the ordinary share capital.
B. The individual must have held the shares for at least five years.
C. The individual must have been an employee or officer of the company.
D. The company must be a trading company or the holding company of a trading group.
Answer: B
Conceptual Explanation: The minimum holding period for Business Asset Disposal Relief
is two years, not five years.
5. A company changes its accounting date, resulting in an 18-month period of account ending
31 December 2023. How is this period divided for Corporation Tax purposes?
A. One single 18-month accounting period.
B. A 12-month accounting period followed by a 6-month accounting period.
C. Three 6-month accounting periods.
D. A 6-month accounting period followed by a 12-month accounting period.
Answer: B
Conceptual Explanation: An accounting period for Corporation Tax cannot exceed 12
months. Therefore, a long period of account is split into the first 12 months and the
remainder.
