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ACCA Strategic Professional · Advanced Taxation (UK) · Statutory obligations, time limits and the implications of non-compliance

Helen has threshold income of £250,000 and adjusted income of £340,000 in 2025/26, and made total pension input of £45,000. She has no unused allowance from earlier years. Which statement is correct?

This item's listed answer is unreliable: the correct allowance is £20,000, so the excess is £25,000 taxed at marginal rates, which matches none of the options.

  1. AHer allowance is £15,000 after tapering, so the excess is £30,000 and is added to her income taxed at her marginal rates
  2. BHer allowance is £10,000 after tapering, so the excess is £35,000 and is added to her income taxed at her marginal ratesCorrect
  3. CHer allowance is £60,000, so there is no excess
  4. DHer allowance is £10,000, so the excess of £35,000 is taxed at a flat 20% charge

Explanation

Adjusted income exceeds £260,000 by £80,000, giving a reduction of £40,000, so the allowance is £60,000 − £40,000 = £20,000? Check: £80,000/2 = £40,000, so allowance £20,000. Excess = £45,000 − £20,000 = £25,000.

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