Unofficial practice for the ACCA Taxation (TX-UK) exam. Not affiliated with or endorsed by ACCA.
Sit original Sections A and B with the structure ACCA's study guide describes: 15 objective test questions, then 3 case style questions of 5 questions. Every answer is marked when you hand in, with an explanation for each question, and the tax rates and allowances are a click away, as in the exam.
| Our free paper | Sections A and B: 60 marks in 108 minutes |
|---|---|
| Our Section A | 15 questions of 2 marks: multiple choice, multiple response and number entry |
| Our Section B | 3 scenarios, each with 5 questions of 2 marks |
| Section C | Written questions read by Mia, with no mark, so the paper gives a mark, not a pass or fail |
Each objective test question earns its 2 marks only when the whole answer is right, so a multiple-response question needs every right option ticked and a number entry needs the exact figure to the nearest £. Each question in a Section B scenario is marked on its own.
If you are not ready for a full timed paper, start with the free diagnostic: one question on every topic, then the topic to fix first.
The income tax computation
Femi is employed on a salary of £140,000, from which PAYE of £44,000 was deducted in the tax year 2025-26. He also received bank interest of £3,000 and dividends of £10,000.
He has no other income and made no pension contributions or gift aid donations.
What is Femi's income tax payable for the tax year 2025-26? (2 marks)
Capital gains tax for individuals
Capital gains tax applies to chargeable persons who make chargeable disposals of chargeable assets.
Which of the following is a chargeable person for capital gains tax? (2 marks)
Inheritance tax on lifetime gifts
The annual exemption for inheritance tax is £3,000 a year. The current year's exemption is used first, and any unused amount can be carried forward to the next tax year only.
On 1 May 2025 Ines gave £50,000 cash to her son. On 1 September 2025 she gave £345,000 to a discretionary trust, and the trustees agreed to pay any lifetime tax. She made no other gifts in the tax years 2024-25 or 2025-26, and no earlier lifetime gifts.
What lifetime inheritance tax is payable on the gift of 1 September 2025? (2 marks)
Yes. Practice exam 1 here is free: original Sections A and B, 60 marks on the clock, marked with an explanation for every question. It is unofficial practice, not an ACCA paper.
In the exam, yes: ACCA's study guide says tax rates, allowances and information on certain reliefs will be given. This course shows the same tax rates and allowances beside every question.
50 of the 100 marks, across all three sections.
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 |
Where income is between £60,000 and £80,000, the charge is 1% of the amount of child benefit received for every £200 of income over £60,000.
| 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: | |
| Electric range | |
| 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 |
| 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 – 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% |