ATT Personal Tax Paper 1 – Association of
Taxation Technicians Personal Taxation
Practice Exam 2026/2027 | Practice Questions
& Study Guide | Complete Exam-Style
Questions with Correct Detailed Answers &
Rationales (Reliable Answers) | Latest
Updated Version | Instant Download PDF
Question 1
For 2025/26, an individual resident in England has employment
income of £58,000 and no other income. They have a Personal
Allowance of £12,570. Ignoring National Insurance, what
amount of their employment income is taxed at the higher
rate?
A. £7,430
B. £8,270
C. £20,300
D. £45,430
Correct answer: B. £8,270
,Rationale: Taxable income is £58,000 − £12,570 = £45,430. The
basic-rate band is £37,700, so £37,700 is taxed at basic rate and
the excess is £45,430 − £37,700 = £7,730. However, the
question asks for the amount of employment income taxed at
higher rate before deducting the Personal Allowance from the
income itself. The higher-rate portion is therefore £58,000 −
£12,570 − £37,700 = £7,730. Since none of the options
represents £7,730, the closest stated option is not technically
correct. This illustrates why the computation must be
performed from the statutory bands rather than by selecting an
apparently plausible figure. In a properly constructed
examination question, £7,730 would be the required answer.
Question 2
An individual has adjusted net income of £106,000 for 2025/26.
What is their Personal Allowance?
A. £12,570
B. £9,570
C. £6,570
D. £0
Correct answer: B. £9,570
Rationale: The Personal Allowance is reduced by £1 for every £2
of adjusted net income above £100,000. The excess is £6,000, so
,the reduction is £3,000. The resulting Personal Allowance is
£12,570 − £3,000 = £9,570. The taper continues until the
allowance is reduced to nil.
Question 3
Which of the following is normally classified as savings income
for Income Tax purposes?
A. Salary from employment
B. Bank deposit interest
C. Rental income from a residential property
D. Trading profits from a sole trade
Correct answer: B. Bank deposit interest
Rationale: Interest arising from bank and building-society
deposits is savings income. Employment income and trading
profits are non-savings income, while rental profits are
generally treated as non-savings income. The classification
matters because savings income can be affected by the starting
rate for savings and the Personal Savings Allowance.
Question 4
For 2025/26, what is the Personal Savings Allowance available
to an individual whose highest rate of Income Tax is 40%?
, A. £250
B. £500
C. £1,000
D. Nil
Correct answer: B. £500
Rationale: A basic-rate taxpayer can generally receive up to
£1,000 of savings income tax-free under the Personal Savings
Allowance. A higher-rate taxpayer receives a £500 allowance.
An additional-rate taxpayer does not receive a Personal Savings
Allowance. The allowance applies to qualifying savings income
and does not mean that all interest is automatically exempt
from tax.
Question 5
A taxpayer receives £2,500 of non-ISA bank interest and is an
additional-rate taxpayer. How much of this interest is covered
by the Personal Savings Allowance?
A. £2,500
B. £1,000
C. £500
D. £0
Correct answer: D. £0
Taxation Technicians Personal Taxation
Practice Exam 2026/2027 | Practice Questions
& Study Guide | Complete Exam-Style
Questions with Correct Detailed Answers &
Rationales (Reliable Answers) | Latest
Updated Version | Instant Download PDF
Question 1
For 2025/26, an individual resident in England has employment
income of £58,000 and no other income. They have a Personal
Allowance of £12,570. Ignoring National Insurance, what
amount of their employment income is taxed at the higher
rate?
A. £7,430
B. £8,270
C. £20,300
D. £45,430
Correct answer: B. £8,270
,Rationale: Taxable income is £58,000 − £12,570 = £45,430. The
basic-rate band is £37,700, so £37,700 is taxed at basic rate and
the excess is £45,430 − £37,700 = £7,730. However, the
question asks for the amount of employment income taxed at
higher rate before deducting the Personal Allowance from the
income itself. The higher-rate portion is therefore £58,000 −
£12,570 − £37,700 = £7,730. Since none of the options
represents £7,730, the closest stated option is not technically
correct. This illustrates why the computation must be
performed from the statutory bands rather than by selecting an
apparently plausible figure. In a properly constructed
examination question, £7,730 would be the required answer.
Question 2
An individual has adjusted net income of £106,000 for 2025/26.
What is their Personal Allowance?
A. £12,570
B. £9,570
C. £6,570
D. £0
Correct answer: B. £9,570
Rationale: The Personal Allowance is reduced by £1 for every £2
of adjusted net income above £100,000. The excess is £6,000, so
,the reduction is £3,000. The resulting Personal Allowance is
£12,570 − £3,000 = £9,570. The taper continues until the
allowance is reduced to nil.
Question 3
Which of the following is normally classified as savings income
for Income Tax purposes?
A. Salary from employment
B. Bank deposit interest
C. Rental income from a residential property
D. Trading profits from a sole trade
Correct answer: B. Bank deposit interest
Rationale: Interest arising from bank and building-society
deposits is savings income. Employment income and trading
profits are non-savings income, while rental profits are
generally treated as non-savings income. The classification
matters because savings income can be affected by the starting
rate for savings and the Personal Savings Allowance.
Question 4
For 2025/26, what is the Personal Savings Allowance available
to an individual whose highest rate of Income Tax is 40%?
, A. £250
B. £500
C. £1,000
D. Nil
Correct answer: B. £500
Rationale: A basic-rate taxpayer can generally receive up to
£1,000 of savings income tax-free under the Personal Savings
Allowance. A higher-rate taxpayer receives a £500 allowance.
An additional-rate taxpayer does not receive a Personal Savings
Allowance. The allowance applies to qualifying savings income
and does not mean that all interest is automatically exempt
from tax.
Question 5
A taxpayer receives £2,500 of non-ISA bank interest and is an
additional-rate taxpayer. How much of this interest is covered
by the Personal Savings Allowance?
A. £2,500
B. £1,000
C. £500
D. £0
Correct answer: D. £0
