PassSpark

ACCA Taxation (TX) 2023 past questions and answers

This 2023 ACCA Taxation (TX) set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2023 set with instant marking.

Practise the full 2023 setTimed exam mode

Sample ACCA Taxation (TX) 2023 questions

1. Paper context: ACCA Applied Skills Taxation (TX), as examined in 2023; the pass mark for this practice paper is 50%. For this question use 2022/23 UK rates for England and Northern Ireland: the personal allowance is £12,570 and the basic rate is 20% on the first £37,700 of taxable income. Mia's only income is employment salary of £40,000 and she is entitled to the full personal allowance. What is her income tax liability for 2022/23?
  1. £4,000
  2. £5,486
  3. £6,000
  4. £8,000

Answer: B. £5,486

Taxable income is £40,000 less £12,570, or £27,430, all within the basic-rate band. Income tax is £27,430 × 20% = £5,486; £8,000 incorrectly applies 20% to salary before deducting the personal allowance.

2. For 2022/23, use a personal allowance of £12,570, a basic-rate band of £37,700 at 20%, a higher rate of 40%, a dividend allowance of £2,000, and dividend tax rates of 8.75% in the basic band and 33.75% in the higher band. Raj has salary of £30,000 and dividends of £10,000, no other income or reliefs, and all his taxable income falls within the basic-rate band. What is his total income tax liability?
  1. £3,486
  2. £4,886
  3. £4,186
  4. £5,486

Answer: C. £4,186

Tax on salary is (£30,000 − £12,570) × 20% = £3,486. The first £2,000 of dividends is covered by the allowance and the remaining £8,000 is taxed at 8.75%, or £700, giving total tax of £4,186.

3. For 2022/23, the standard personal allowance is £12,570 and is reduced by £1 for every £2 of adjusted net income above £100,000. Leila's adjusted net income is £105,000, and she has no other allowance adjustments. By how much is her personal allowance reduced?
  1. £2,500
  2. £5,000
  3. £1,250
  4. £12,570

Answer: A. £2,500

Leila is £5,000 above the £100,000 threshold, so the reduction is £5,000 ÷ 2 = £2,500. The £5,000 figure incorrectly treats the reduction as pound-for-pound.

4. In 2022/23, Business Asset Disposal Relief (BADR) applies a 10% rate to qualifying gains, subject to a £1 million lifetime limit, and the relevant qualifying conditions must generally be met for two years before disposal. All other BADR conditions are met for Sam, who is an officer and owns 5% of the shares in a trading company. He sells the shares after owning them for 18 months. Can his gain qualify for BADR?
  1. Yes, because ownership of at least 5% is sufficient on its own.
  2. Yes, because the 10% rate applies to any disposal of trading-company shares.
  3. Yes, provided his gain is below £1 million.
  4. No, because he has not met the two-year qualifying period.

Answer: D. No, because he has not met the two-year qualifying period.

Sam has owned the shares for only 18 months, short of the stated two-year qualifying period. The 5% holding and lifetime limit do not replace the required qualifying period.

5. For 2022/23, the annual exempt amount is £12,300 and capital gains tax rates are 10% and 20% for non-residential assets. Nia, a higher-rate taxpayer, makes a chargeable gain of £20,000 and an allowable capital loss of £5,000 in the same tax year. There are no other gains or losses. What is her taxable gain after using the current-year loss and annual exempt amount?
  1. £2,700
  2. £7,700
  3. £15,000
  4. £20,000

Answer: A. £2,700

The current-year loss first reduces the gain to £15,000, then the £12,300 annual exempt amount reduces the taxable gain to £2,700. £7,700 omits the current-year loss.

More ACCA Taxation (TX) years

2026202520242022

All ACCA Taxation (TX) years · ACCA subjects

PassSpark questions are original practice questions written to each exam's syllabus and format, in the style of past questions. They are not official past papers and are not affiliated with JAMB, WAEC, NECO, any university or any exam body.