ICAEW CFAB - Principles of Taxation - Chapter 3 Quiz

Which of the following is chargeable to income tax?

• Interest from a NS&I investment account

• Dividends received from an Individual Savings Account

• £10 Lottery winnings

• Scholarship awarded by a university

Which two of the following sources of income are non-savings income?

• Interest from a building society

• Property income

• Dividend from a UK company

• Trading profits

At what rates is tax charged on savings income?

• 0%, 8.75%, 33.75%, 39.35%

• 0%, 20%, 40%, 45%

• 0%, 20%, 33.75%

• 20%, 33.75%, 40%, 45%

How is higher rate tax relief given for a Gift Aid donation?

• Deducted from net income

• Treated as paid net of higher rate tax

• Basic rate band extended by grossed up donation

• No higher rate tax relief given

A taxpayer has net income of £42,800 in 2023/24.

Requirement

What savings income nil rate band are they entitled to?

• £12,570

• nil

• £1,000

• £500

A taxpayer has employment income of £176,000 in 2023/24. This is their only source of income in this tax year.

Requirement

What is the income tax liability for 2023/24?

• £59,747

• £58,747

• £64,403

• £65,403

In addition to his salary of £24,000, Aaron received the following income in 2023/24:

Interest received from an ISA 200: £200

Interest received on National Savings & Investments Direct Saver Account: £64

Income tax repayment interest: £25

Requirement

His net income for the year is:

• £24,025

• £24,289

• £24,064

• £24,200

In addition to his salary of £9,000, Nuru received the following income in 2023/24:

Tips from customers: £250

Interest received on an ISA investment: £44

Disability living allowance: £60

Requirement

His net income for the year is:

• £9,000

• £9,250

• £9,310

• £9,354

Perry received income from various sources during 2023/24.

Requirement

Which two of the following are exempt from income tax?

• £100 of National Savings & Investments Direct Saver Account interest

• £80 of National Savings Certificate interest

• £40 of interest received on a loan to his friend George

• £56 of dividends received from a shareholding in X plc

• £40 of dividends received on Y plc shares held in a stocks and shares ISA

During 2023/24 Leonard had earnings of £30,670 from his employer. His only other sources of income were a dividend received of £600 and bank interest received of £460. He also paid £352 as a Gift Aid donation to a registered charity.

Requirement

What is Leonard’s taxable income for 2023/24?

• £31,730

• £18,100

• £19,160

• £18,720