ACCA Advanced Taxation (ATX) Paper Guide to Pass (2026)
We know how intimidating Advanced Taxation (ATX) can feel. You might be thinking:
- “Too many tax rules… How will I remember everything?”
- “What if I make a mistake and fail?”
- “This exam seems impossible to manage in 3 hours!”
Take a deep breath. We’re here to guide you.
ATX isn’t about memorizing every tiny detail of tax law. It’s about thinking like a real tax advisor and applying your knowledge to help individuals and businesses make smart, legal, and professional tax decisions.
At this level, ACCA expects us to act like a professional sitting in front of a client, not just someone doing calculations for marks. And yes we can guide you through it step by step.
What ATX Really Tests
In real life, clients don’t care about formulas they care about results and advice. For example, a client may ask:
- “I want to sell my business. How much tax will I pay?”
- “Should I gift my property to my children this year?”
- “I am moving abroad what does this mean for my taxes?”
ATX tests whether we can:
- Calculate taxes accurately
- Identify tax planning opportunities
- Warn about risks
- Advise on the best legal options
- Stay professional and ethical
So, while calculations are important, exam marks are equally in our written advice.
How the ATX Exam Works
The exam is 3 hours and 15 minutes, which sounds long, but we can manage it if we are structured.
Section A, 50 Marks (Compulsory)
This is usually one big case study. We’ll often see a client facing multiple tax issues at once, for example:
- Selling a business or shares
- Transferring property
- Receiving dividends
- Planning for retirement
Here, the examiner wants to see that we can deal with multiple taxes in one scenario and give clear professional advice.
Section B, Two Questions (25 Marks Each)
We pick 2 out of 3 questions. These usually focus on one area of tax but still require calculations plus professional discussion. Common topics include:
- Inheritance tax planning
- Corporate tax (group relief, losses)
- VAT issues
- Capital gains planning
Why ATX Feels Difficult
We understand why students feel nervous. Here’s a simple table breaking it down:
| Why Students Feel Stressed | What It Really Means | How We Can Fix It |
| Too many rules | Students think they must memorize everything | Focus on main principles and practice applying them |
| Long, multi-part questions | Students panic and get lost | Break the scenario into parts and tackle one tax at a time |
| Multiple taxes combined | Hard to organize answers | Use tables and headings to structure answers clearly |
| Fear of forgetting reliefs | Students freeze mid-calculation | Make cheat sheets and summary tables for key reliefs |
| Weak explanation skills | Students lose professional marks | Practice writing advisory-style answers in plain English |
The truth is: we don’t need to memorize everything. Understanding the key principles and practicing their application is what gets results.
The Main Taxes We Must Master
ATX builds on the basics of Taxation (TX), but at a higher, advisory level. Let’s break it down.
1. Income Tax
Applies to individuals. We need to understand:
- Salary and wages
- Self-employment income
- Rental income
- Investment income
- Loss relief
At ATX, we go further:
- Should the client delay or bring forward income?
- Can losses be used efficiently?
- Is it better to incorporate the business?
It’s not just about calculating tax it’s about giving advisory guidance.
2. Corporation Tax
Applies to companies. We need to understand:
- Taxable profits
- Loss relief (including group relief)
- Associated and close companies
In the exam, we may have to answer questions like:
- Should these companies form a group?
- How can losses be used effectively?
- When should a company delay spending to reduce tax?
Again, calculations matter but advisory notes are key.
3. Capital Gains Tax (CGT)
This is often tested in real-life scenarios. We must know:
| Relief | Simple Explanation |
| Business Asset Disposal Relief | Reduces tax when selling business assets |
| Gift Relief | Defers capital gains tax when giving an asset as a gift |
| Rollover Relief | Allows us to defer gains by reinvesting |
We also need to advise:
- Is it better to sell now or later?
- Should the asset be gifted instead of sold?
- How can the tax liability be reduced legally?
4. Inheritance Tax (IHT)
This often comes up in planning questions.
We need to understand:
| Area | Explanation |
| Lifetime transfers | Gifts made while alive that may trigger IHT |
| Exemptions | Gifts that are allowed without tax |
| Business Property Relief | Relief for business assets to reduce IHT |
| Agricultural Relief | Relief for farmland or property used for agriculture |
We may have to advise clients on estate planning strategies to reduce tax legally.
5. VAT
VAT is tested less often but can appear in practical scenarios.
We need to know:
| Topic | Simple Explanation |
| Registration rules | When must a business register for VAT |
| Partial exemption | How to handle VAT on mixed activities |
| Group registration | When multiple companies can register as one |
| Overseas VAT | Handling VAT for cross-border transactions |
Here, logic and clarity matter more than memorizing every rate.
Ethics, A Key Area in ATX
Ethics is vital. Examiners look for us to spot risky or illegal planning.
| Term | What It Means |
| Tax avoidance | Legal tax planning to reduce liability |
| Tax evasion | Illegal tax action |
| Aggressive planning | High-risk strategies that may fail |
If a client asks us to do something illegal, we must say no and explain why. Doing this well is an easy way to score marks.
How We Should Answer ATX Questions
We recommend this approach:
- Identify all taxes involved.
- Break the scenario into parts.
- Calculate tax for each part.
- Explain which reliefs and exemptions we used.
- Highlight risks.
- Give a clear recommendation.
Example:
Instead of just writing:
“The capital gains tax is £50,000.”
We should write:
“The capital gains tax would be £50,000. However, by using business asset disposal relief, the client can reduce it to £30,000. We recommend claiming the relief as it is fully legal and reduces the tax payable significantly.”
This advisory style is what ATX rewards.
Time Management Tips
We need to manage the 3 hours and 15 minutes wisely.
- Use 1.8 minutes per mark as a guideline.
- For a 25-mark question, spend roughly 45 minutes.
- Split time between: calculations, written advice, and checking work.
Leaving a few minutes at the end to review and tidy our answers is crucial.
How We Can Prepare for ATX
Here’s a practical preparation plan:
Step 1: Strengthen TX foundation.
ATX builds directly on earlier Taxation knowledge. Without a strong base, ATX is much harder.
Step 2: Practice full case studies.
Don’t just practice parts. Train your stamina for long exam questions.
Step 3: Create summary sheets for reliefs and conditions.
Focus on understanding rules instead of memorizing rates.
Step 4: Practice writing advisory answers.
Clear headings, structured sentences, and professional tone are key.
Step 5: Read examiner reports.
They clearly show where students lose marks and how we can improve.
Is ATX the Right Paper for Us?
ATX is ideal if we:
- Enjoy dealing with rules and legislation
- Like advisory work
- Can work with numbers and calculations confidently
- Want to work in tax consultancy or professional practice
If we dislike detailed rules or legislation-heavy exams, ATX may feel overwhelming.
Final Advice, From a Specialist Perspective
Advanced Taxation is challenging, but predictable. Students who succeed are not necessarily the smartest they are the ones who:
- Understand how taxes interact
- Apply rules logically
- Write clear, structured, advisory answers
- Manage time effectively
- Stay calm under pressure
If we follow this approach, practise consistently, and focus on advisory skills, passing ATX on the first attempt is absolutely achievable.