Unofficial practice for the ACCA Advanced Taxation (ATX-UK) exam. Not affiliated with or endorsed by ACCA.
Sit three original questions in the exam's structure on a 3 hours 15 minutes clock. Each figure you enter is checked against the key, and Mia reads each written part and says what it covers and what to add.
| Our free paper | 3 questions, 100 marks, 195 minutes |
|---|---|
| Section A | 50 marks: a case study on several taxes, with ethics and professional skills marks |
| Section B | Two questions of 25 marks, one on business tax and one on personal tax |
| Feedback | Figures checked, written parts read by Mia, with no mark and no pass or fail |
A figure is checked against the key, with the working. A written part is read by Mia against the points a strong answer makes: she quotes the sentences that make them and names the next point to add, with no mark and no model answer.
If you are not ready for a full timed paper, start with the free diagnostic: one short question on every topic in the course's own format, then the topic to fix first and a lesson on it.
Short questions in the course’s own format, not ACCA’s: the exam itself is all written.
The unincorporated business
Mira has traded for many years and draws up accounts to 30 June. Her tax-adjusted trading profits are £48,000 for the year ended 30 June 2025 and £60,000 for the year ended 30 June 2026. Ignore transition profits. Treat each tax year as running from 1 April to 31 March.
What are Mira's trading profits for 2025/26? (2 marks)
Shares: rights, bonds and takeovers
Bruno owned 8,000 shares in Marlow Ltd, which cost him £40,000. In 2025/26 Norcott plc took over Marlow Ltd for bona fide commercial reasons. For each Marlow Ltd share Bruno received two Norcott plc shares, worth £6 each, and £4 in cash. Bruno held less than 5% of Marlow Ltd and the cash is not small.
What is Bruno's chargeable gain on the takeover? (2 marks)
Inheritance tax: scope, valuation, reliefs and exemptions
Greta has owned 25% of the shares in Garston Ltd, an unquoted trading company, for six years. On 1 November 2025 she gave the whole holding, then worth £400,000, to her son.
Garston Ltd's assets are worth £2,000,000 in total. They include an investment property worth £500,000, which has never been used in the company's trade and is not needed for its future use.
Business property relief is 100% for shares in an unquoted trading company owned for at least two years.
What is the value of Greta's gift after business property relief, before any exemptions? (2 marks)
Yes. Practice exam 1 here is free: three original written questions in the exam's structure, 100 marks on a 3 hours 15 minutes clock. It is unofficial practice, not an ACCA paper.
No. Figures are checked against the key and Mia reads the written parts, but neither is an examiner's mark, so the paper gives no pass or fail.
50 of the 100 marks, across both sections.
Unofficial practice for the ACCA Advanced Taxation (ATX-UK) exam, not affiliated with ACCA. ACCA is a trademark of the Association of Chartered Certified Accountants, which does not endorse this course. Every question here is original. No VAT is charged.
The supplementary instructions and the tax rates and allowances, as the exam provides them (Finance Act 2025).
| Normal rates | Dividend rates | ||
|---|---|---|---|
| Basic rate | £1 – £37,700 | 20% | 8·75% |
| Higher rate | £37,701 – £125,140 | 40% | 33·75% |
| Additional rate | £125,141 and over | 45% | 39·35% |
| Savings income nil rate band – Basic rate taxpayers | £1,000 | ||
| Savings income nil rate band – Higher rate taxpayers | £500 | ||
| Dividend nil rate band | £500 |
A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income.
| £ | |
|---|---|
| Personal allowance | 12,570 |
| Transferable amount | 1,260 |
| Income limit | 100,000 |
Where adjusted net income is £125,140 or more, the personal allowance is reduced to zero.
| Days in UK | Previously resident | Not previously resident |
|---|---|---|
| Less than 16 | Automatically not resident | Automatically not resident |
| 16 to 45 | Resident if 4 UK ties (or more) | Automatically not resident |
| 46 to 90 | Resident if 3 UK ties (or more) | Resident if 4 UK ties |
| 91 to 120 | Resident if 2 UK ties (or more) | Resident if 3 UK ties (or more) |
| 121 to 182 | Resident if 1 UK tie (or more) | Resident if 2 UK ties (or more) |
| 183 or more | Automatically resident | Automatically resident |
| The relevant base level of CO2 emissions is 55 grams per kilometre. | |
| The percentage rates applying to petrol cars (and diesel cars meeting the RDE2 standard) with CO2 emissions up to this level are: | |
| 51 grams to 54 grams per kilometre | 16% |
|---|---|
| 55 grams per kilometre | 17% |
| The percentage for electric cars with zero CO2 emissions is 3%. | |
| For hybrid-electric cars with CO2 emissions between 1 and 50 grams per kilometre, the electric range of the car is relevant: | |
| 130 miles or more | 3% |
| 70 to 129 miles | 6% |
| 40 to 69 miles | 9% |
| 30 to 39 miles | 13% |
| Less than 30 miles | 15% |
The base figure for calculating the car fuel benefit is £28,200.
The company van benefit scale charge is £4,020, and the van fuel benefit is £769.
Vans producing zero CO2 emissions have a 0% benefit.
The overall investment limit is £20,000.
The rent-a-room relief limit is £7,500.
| Annual allowance 2022/23 | £40,000 |
|---|---|
| 2023/24 to 2025/26 | £60,000 |
| Minimum allowance | £10,000 |
| Threshold income limit | £200,000 |
| Income limit | £260,000 |
The maximum contribution which can qualify for tax relief without any earnings is £3,600.
| Up to 10,000 miles | 45p |
|---|---|
| Over 10,000 miles | 25p |
| Plant and machinery | |
| Main pool | 18% |
|---|---|
| Special rate pool | 6% |
| Cars | |
| New cars with zero CO2 emissions | 100% |
| Second-hand cars with zero CO2 emissions | 18% |
| CO2 emissions between 1 and 50 grams per kilometre | 18% |
| CO2 emissions over 50 grams per kilometre | 6% |
| Annual investment allowance | |
| Rate of allowance | 100% |
| Expenditure limit | £1,000,000 |
| Enhanced capital allowances for companies | |
| Main pool first year allowance | 100% |
| Special rate pool first year allowance | 50% |
| Structures and buildings allowance | |
| Straight line allowance | 3% |
Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.
| Financial year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Small profits rate | 19% | 19% | 19% |
| Main rate | 25% | 25% | 25% |
| Lower limit | £50,000 | £50,000 | £50,000 |
| Upper limit | £250,000 | £250,000 | £250,000 |
| Standard fraction | 3/200 | 3/200 | 3/200 |
(Upper limit – augmented profits) x standard fraction x taxable total profits / augmented profits
| Profit threshold | £1,500,000 |
|---|
| Standard rate | 20% |
|---|---|
| Registration limit | £90,000 |
| Deregistration limit | £88,000 |
| Days late | Penalty |
|---|---|
| Up to 15 days | None |
| 16 to 30 days | 3% |
| More than 30 days | 6% plus a daily penalty at an annual rate of 10% |
| Nil rate band | £325,000 |
|---|---|
| Residence nil rate band | £175,000 |
| Rate of tax on excess over nil rate band – Lifetime rate | 20% |
| – Death rate | 40% |
| Years before death | Percentage reduction |
|---|---|
| More than 3 but less than 4 years | 20% |
| More than 4 but less than 5 years | 40% |
| More than 5 but less than 6 years | 60% |
| More than 6 but less than 7 years | 80% |
| Lower rate | 18% |
|---|---|
| Higher rate | 24% |
| Annual exempt amount | £3,000 |
| Lifetime limit – business asset disposal relief | £1,000,000 |
|---|---|
| investors’ relief | £1,000,000 |
| Rate of tax | 14% |
| Class 1 Employee | £1 – £12,570 per year | Nil |
|---|---|---|
| £12,571 – £50,270 per year | 8% | |
| £50,271 and above per year | 2% | |
| Class 1 Employer | £1 – £5,000 per year | Nil |
| £5,001 and above per year | 15% | |
| Employment allowance | £10,500 | |
| Class 1A | 15% | |
| Class 4 | £1 – £12,570 per year | Nil |
| £12,571 – £50,270 per year | 6% | |
| £50,271 and above per year | 2% |
| Official rate of interest | 3·75% |
|---|---|
| Rate of interest on underpaid tax | 8·50% |
| Rate of interest on overpaid tax | 3·50% |
| Taxpayer behaviour | Maximum penalty | Minimum penalty – unprompted disclosure | Minimum penalty – prompted disclosure |
|---|---|---|---|
| Deliberate and concealed | 100% | 30% | 50% |
| Deliberate but not concealed | 70% | 20% | 35% |
| Careless | 30% | 0% | 15% |
| Up to £150,000 | 0% |
|---|---|
| £150,001 – £250,000 | 2% |
| £250,001 and above | 5% |
| Shares | 0·5% |
|---|