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UK Taxation Quiz

Comprehensive quiz covering UK tax system, income tax, capital gains tax, inheritance tax, and tax planning strategies for individuals and businesses.

Topics Covered: Tax year periods, income tax bands, personal allowances, capital gains tax, inheritance tax, tax reliefs, self-assessment, and tax-efficient investments.

This quiz is specifically designed for tax professionals, financial advisers, accountants, and individuals preparing for taxation examinations.

UK taxation quiz, income tax, capital gains tax, inheritance tax, self-assessment, tax planning, personal allowance

UK Taxation Quiz

1. What is the UK tax year period?

A. 1 January to 31 December.
B. 6 April to 5 April of the following year.
C. 1 April to 31 March.
D. 1 October to 30 September.

2. What is the primary purpose of reciprocal tax treaties?

A. To ensure individuals are not taxed twice on the same income or gains.
B. To increase tax revenue for the UK government.
C. To exempt UK residents from paying taxes in other countries.
D. To simplify the tax filing process for people living abroad.

3. Which of the following is an example of unearned income?

A. Salary from employment.
B. Profits from self-employment.
C. Interest from bank deposits.
D. Pension income.

4. What is the personal savings allowance (PSA) for a basic-rate taxpayer in the UK?

A. £1,000.
B. £500.
C. £2,000.
D. £0.

5. Which of the following is not a taxable income?

A. Salary from minimum wage employment.
B. Dividends from shares.
C. Lottery prizes.
D. Rental income from property.

6. What is the tax rate for the basic rate band in the UK?

A. 20%.
B. 40%.
C. 45%.
D. 10%.

7. How do self-employed individuals typically pay their income tax?

A. Through the PAYE system.
B. Via self-assessment, with payments due on 31 January and 31 July.
C. Through monthly deductions via their business.
D. By paying a lump sum at the end of the tax year.

8. What is the purpose of a tax code for employees?

A. To determine the amount of National Insurance contributions.
B. To calculate the amount of tax-free income based on allowances and deductions.
C. To identify the employee’s job role for tax purposes.
D. To determine the employee’s eligibility for state benefits.

9. Which of the following is an example of a non-taxable income?

A. Interest from a bank account.
B. Dividends from shares.
C. Proceeds from a qualifying life assurance policy.
D. State Pension.

10. What is the starting rate for savings income in the UK?

A. 0%.
B. 10%.
C. 20%.
D. 40%.

11. What is the annual exempt amount for Capital Gains Tax in the UK?

A. £1,000.
B. £3,000.
C. £5,000.
D. £12,570.

12. Which of the following assets is exempt from Capital Gains Tax?

A. Shares held in an ISA.
B. Luxury collectables.
C. Business assets.
D. UK government gilts.

13. What is the purpose of private residence relief?

A. To exempt gains from the sale of a main residence from Capital Gains Tax.
B. To reduce the tax on rental income from a second property.
C. To provide relief for business assets.
D. To exempt gifts from inheritance tax.

14. What is the main purpose of business asset disposal relief?

A. To reduce the rate of Capital Gains Tax on gains from the sale of qualifying business assets.
B. To exempt business assets from inheritance tax.
C. To defer Capital Gains Tax on business assets indefinitely.
D. To provide relief for losses on business assets.

15. What is the nil-rate band for Inheritance Tax in the UK?

A. £175,000.
B. £325,000.
C. £500,000.
D. £1,000,000.

16. What is the residence nil-rate band for Inheritance Tax?

A. £100,000.
B. £175,000.
C. £250,000.
D. £325,000.

17. What is a potentially exempt transfer?

A. A transfer of business assets that is exempt from Capital Gains Tax
B. A transfer of assets to a trust that is immediately subject to Inheritance Tax.
C. A gift made to a charity that is exempt from Inheritance Tax.
D. A gift made during a person's lifetime that is exempt from Inheritance Tax if the donor survives for seven years.

18. What is the time limit for reporting and paying CGT on the sale of residential property?

A. 30 days.
B. 60 days.
C. 90 days.
D. 14 days.

19. What is the purpose of gift hold-over relief?

A. To defer Capital Gains Tax on gifts of certain assets until the recipient disposes of them.
B. To exempt gifts from Inheritance Tax if the donor survives for seven years.
C. To reduce the rate of C on gifts of business assets.
D. To provide relief for losses on gifts of personal assets.

20. What is the maximum combined nil-rate band and residence nil-rate band for a married couple or civil partners?

A. £500,000.
B. £650,000.
C. £1,000,000.
D. £1,500,000.

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