Short answer: SQE1 examines six taxes, and never as a subject of their own. Income tax, capital gains tax, corporation tax and VAT are tested inside Business Law and Practice (FLK1). Stamp duty land tax (land transaction tax in Wales), VAT on property and capital gains tax on a home are tested inside Property Law and Practice (FLK2). Inheritance tax is tested inside Wills and the Administration of Estates (FLK2), with business property relief also appearing in Business Law. The SRA sets no separate quota for tax, so expect a handful of questions per paper rather than a tax section. And under the specification that applies to every assessment from September 2026, any rate, threshold or monetary value of a relief you need is given in the question. What is examined is the method, the reliefs and their conditions, and who pays.
Everything in this guide is taken from the SRA's SQE1 Assessment Specification as read on 20 September 2026, and from the subject guides that cover each host subject in full.
Where each tax sits
| Tax | Host subject (paper) | What the SRA says is examinable | January 2027 session |
|---|---|---|---|
| Income tax | Business Law and Practice (FLK1) | Chargeable persons (employees, sole traders, partners, shareholders, lenders and debenture holders); basis of charge, main reliefs and exemptions; calculation and collection; anti-avoidance | FLK1 Session 1 |
| Capital gains tax | Business Law and Practice (FLK1) | Chargeable persons (sole traders, partners, shareholders); calculation of gains, allowable deductions, main reliefs and exemptions; collection; anti-avoidance | FLK1 Session 1 |
| Corporation tax | Business Law and Practice (FLK1) | Income profits and chargeable gains, allowable deductions, main reliefs and exemptions; calculation, payment and collection; tax treatment of distributions to shareholders; anti-avoidance in outline | FLK1 Session 1 |
| VAT | Business Law and Practice (FLK1) | Scope, supply, input and output tax; registration and VAT invoices; returns, payment and record keeping | FLK1 Session 1 |
| Inheritance tax (business) | Business Law and Practice (FLK1) | Business property relief | FLK1 Session 1 |
| SDLT and LTT | Property Law and Practice (FLK2) | Basis of charge in England and in Wales for residential property and for non-residential freehold property | FLK2 Session 2 |
| VAT on property | Property Law and Practice (FLK2) | What is a taxable supply; standard, exempt and zero-rated supplies; why a client opts to tax and what it does | FLK2 Session 2 |
| Capital gains tax (property) | Property Law and Practice (FLK2) | Basis of charge; private residence relief | FLK2 Session 2 |
| Inheritance tax | Wills and the Administration of Estates (FLK2) | Lifetime transfers that are immediately chargeable, potentially exempt transfers and gifts with reservation of benefit; transfers on death; exemptions and reliefs; anti-avoidance; funding the initial payment; burden, liability and incidence | FLK2 Session 1 |
| Income tax and CGT in an estate | Wills and the Administration of Estates (FLK2) | Personal representatives' liability during the administration; beneficiaries' CGT on inherited assets | FLK2 Session 1 |
The session column matters from January 2027, when each SQE1 session covers a fixed group of subjects. Business taxes arrive in the first FLK1 session alongside dispute resolution and legal services; inheritance tax sits in the first FLK2 session with trusts and land; property taxes are in the second FLK2 session with the criminal subjects.
How many tax questions are there?
Fewer than candidates fear, but not none. The SRA's blueprint gives each host subject a share of its paper, not tax a share of its own: Business Law and Practice is 14 to 20% of FLK1, and Property Law and Practice and Wills and the Administration of Estates are each 14 to 20% of FLK2. On a 170-question paper that is 24 to 34 questions per subject, and tax is one topic among many inside each. Providers who track the sample questions put the total at a handful per paper; their estimates differ, none is based on published SRA data, and nothing the SRA has released lets anyone be more precise. The high-yield topics post explains the blueprint arithmetic.
The practical conclusion: tax is not worth a month, and it is not worth skipping. A candidate who can run each computation in order and knows the conditions for the main reliefs will take most of what is on offer in a few hours of focused work.
What "the figures will be provided" actually means
The specification's own words, under the heading Taxation: "A question may require a candidate to perform a calculation by applying rules, rates, percentages and thresholds to identify a correct figure. For questions on taxation, candidates will be expected to be aware of the availability of certain reliefs and exemptions and of any conditions relevant to their application. However, where candidates are required to apply the monetary value of any exemptions and reliefs, particular rates or thresholds, these will be provided."
Read that as two lists.
Given in the question: tax rates and bands; the personal allowance; the annual exempt amount; the nil-rate band and residence nil-rate band; the VAT registration threshold; SDLT bands and surcharge percentages; the monetary value of any exemption or relief.
Still yours to know: who is a chargeable person; what is chargeable and what is deductible; the order of a computation; which reliefs exist, their conditions and what they do; the deadlines and how each tax is collected; who bears the tax as between an estate and its beneficiaries. The January 2027 specification post shows how questions were rewritten to supply the figures.
This is a genuine simplification. It is also a trap, because it tempts candidates to skip tax altogether on the theory that the numbers will be handed over. The numbers will; the method will not.
Income tax
Income tax questions are set on individuals: employees, sole traders, partners, shareholders receiving dividends, and lenders receiving interest. The examinable skeleton is the computation. Add up income by type, deduct allowable reliefs, deduct the personal allowance, then tax each slice in the statutory order: non-savings income first, then savings income, then dividends. The question will give you the bands and rates; you supply the order and the classification.
Three things carry the marks. A partnership is tax-transparent, so each partner is taxed on a share of profits as an individual, whatever the partnership agreement says about drawings. A company's dividend is taxed in the shareholder's hands with no credit for the corporation tax the company has already paid; corporation tax is not a credit, and a question comparing salary with dividend turns on that. And collection differs: employees pay through PAYE; the self-employed and partners pay through self-assessment with payments on account. The Business Law and Practice guide works through the computation in full.
Capital gains tax
CGT appears twice. In Business Law it is the disposal of business assets and shares by sole traders, partners and shareholders. In Property Law it is the sale of a home. The computation is the same: disposal proceeds less acquisition cost and incidental costs of acquisition and disposal, less allowable losses, less the annual exempt amount (a figure the question gives), then the rate. Losses are set against gains; the annual exempt amount is per person, per tax year, and cannot be carried forward.
The reliefs are where the questions live. Business asset disposal relief reduces the rate on a qualifying disposal of a business or of shares in a personal trading company, subject to ownership and holding conditions; the question will state the reduced rate and the lifetime limit, but you must know that the relief exists and what qualifies. Hold-over relief defers the gain on a gift of business assets; roll-over relief defers it on the replacement of business assets. In Property Law, private residence relief exempts the gain on a main residence for periods of occupation, with the final nine months of ownership always treated as occupied. A house that was let for part of the ownership, or a second home, is the standard scenario, and the marks are for spotting which periods qualify, not for arithmetic.
Corporation tax
A company pays corporation tax on its taxable total profits: income profits plus chargeable gains, less allowable deductions and reliefs. Trading losses can be relieved against other profits of the same period, carried back or carried forward, and a question will test which route is available rather than the rate. Dividends are not deductible in computing the company's profits, and the company's payment of corporation tax gives the shareholder nothing to set against income tax on the dividend.
Collection is examinable and mechanical. A company that is not large enough to pay by instalments pays its corporation tax nine months and one day after the end of its accounting period, and files its return within twelve months. Candidates lose the question by confusing the two dates, or by applying the individual self-assessment timetable to a company.
VAT
VAT is tested in both papers and the concepts are the same in each. A taxable person making taxable supplies charges output tax and recovers input tax; the difference is paid to or reclaimed from HMRC on a periodic return. Supplies are standard-rated, reduced-rated, zero-rated or exempt, and the distinction between zero-rated and exempt is the classic question: a zero-rated supply is taxable at nil and lets the supplier recover input tax; an exempt supply is outside the charge and blocks recovery. Registration is compulsory once taxable turnover passes the threshold (a figure the question gives), and a VAT invoice must be issued for a taxable supply to a registered customer.
In Property Law the same rules are applied to land. Most sales and lettings of land are exempt, so a commercial landlord who has paid VAT on building works cannot recover it unless it opts to tax, which makes its supplies of that building standard-rated: the landlord recovers input tax and its tenants pay VAT on the rent. The sale of a new commercial building is standard-rated without any option. The question tests why a client would opt to tax and what it does to the other party, not the rate.
SDLT and land transaction tax
Stamp duty land tax applies to land in England; Wales has its own land transaction tax with its own bands. The SRA examines the basis of charge for residential property and for non-residential freehold property in both jurisdictions. Both taxes are charged in slices, so each band's rate applies only to the part of the price within that band, and a question that gives you the bands is testing whether you apply them that way rather than to the whole price.
Two points recur. Residential purchases attract higher rates when the buyer already owns another dwelling, and first-time buyers get relief up to a stated price, conditions attached. And the SDLT return and payment are due within 14 days of completion in England (30 days for LTT in Wales), a deadline the Property Law and Practice guide places in the post-completion sequence. Multiple dwellings relief was abolished in 2024, so a question built on it is testing whether you know it has gone. On a commercial purchase where VAT is charged on the price, SDLT is calculated on the VAT-inclusive figure.
Inheritance tax
IHT carries more of the tax questions than any other tax, because it sits at the centre of Wills and the Administration of Estates and reappears in Business Law through business property relief. The examinable structure is:
- Lifetime transfers. A gift to an individual is a potentially exempt transfer: no tax when made, and exempt if the donor survives seven years. A gift into most trusts is a chargeable lifetime transfer, taxed at the lifetime rate when made if it exceeds the available nil-rate band. A gift with reservation of benefit, such as giving away a house and continuing to live in it, is treated as still in the donor's estate on death.
- Death. The estate is valued, exemptions applied, the nil-rate band and, for a residence passing to direct descendants, the residence nil-rate band set against it, and the balance taxed at the death rate. Transfers in the seven years before death use up nil-rate band first, in date order, which is the cumulation rule and the most-missed step.
- Taper relief reduces the tax on a failed potentially exempt transfer made more than three years before death. It reduces the tax, not the value of the gift, and it is worth nothing where the gift falls within the nil-rate band.
- Exemptions and reliefs. Spouse and civil partner exemption; charity exemption; the annual exemption, small gifts and normal expenditure out of income; business property relief at 100% or 50% after two years' ownership of qualifying business assets; agricultural property relief. The question gives the values; you supply the conditions.
- Funding, burden and incidence. Personal representatives must usually pay the tax on the non-instalment part of the estate before the grant issues, and the specification lists the methods of funding that initial payment. It also lists who bears the tax: a specific gift is generally free of tax and the residue bears it, unless the will says otherwise.
- Tax during administration. Personal representatives are liable to income tax and CGT on the estate's income and disposals during the administration, and a beneficiary who later sells an inherited asset uses its probate value as the base cost.
The IHT payment deadline, six months after the end of the month of death, is the date to attach to all of this. The Wills and Administration of Estates guide sets the computation out step by step.
Three questions in the "figures provided" style
Salary or dividend. A director-shareholder asks whether to take £10,000 as salary or as a dividend. The question gives the corporation tax rate, the income tax rate on the relevant slice, the dividend rate and the dividend allowance. The method: salary is deductible for the company and taxed as non-savings income with employer's and employee's national insurance; a dividend is paid out of profits that have already borne corporation tax, is not deductible, carries no national insurance and is taxed at the dividend rate with no credit. The best answer is the option that runs both routes to a net figure; the wrong options apply corporation tax as a credit or forget that the dividend is paid from taxed profit.
A failed gift. A woman gave £400,000 to her son and died four and a half years later; the question gives the nil-rate band and the taper table. The method: the gift is a potentially exempt transfer that failed; it is the first transfer in the seven years before death, so it takes the nil-rate band first; the excess is taxed at the death rate, reduced by the taper percentage for a gift made between four and five years before death; and the son, as donee, is primarily liable for that tax. The wrong options taper the value of the gift, or set the nil-rate band against the death estate first.
A second home. A buyer who already owns a flat buys a house in England; the question gives the residential bands and the higher-rate surcharge. The method: apply each band's rate to the slice of price within it, add the surcharge to every band because the buyer will own two dwellings at the end of the day, and file and pay within 14 days of completion. The wrong options tax the whole price at the top rate, or omit the surcharge because the flat is to be sold "soon"; the test is ownership on completion, with a refund available if the old home is sold within the time limit the question states.
The traps that decide the tax questions
- Treating corporation tax as a credit against the shareholder's income tax.
- Taxing a partnership as if it were a company. Partners are taxed individually on their shares.
- Applying a tax band to the whole amount instead of the slice within the band, in income tax and in SDLT.
- Confusing zero-rated (taxable, input tax recoverable) with exempt (not taxable, input tax blocked).
- Forgetting that most supplies of land are exempt until the landlord opts to tax.
- Setting the nil-rate band against the death estate before the lifetime transfers that precede it.
- Tapering the value of a failed gift rather than the tax on it, or applying taper to a gift inside the nil-rate band.
- Missing the two-year ownership condition for business property relief, or claiming it for an investment business.
- Using the individual's self-assessment dates for a company, or the 30-day Welsh deadline for an English purchase.
- Spending revision hours memorising rates that the question will print.
How to revise tax for January 2027
Give it a weekend, not a month, and spend the time on computations rather than tables. Work each tax as a numbered method until you can write the steps from memory, then do questions until the reliefs' conditions are automatic. Practise in the session groupings: business taxes with the rest of Business Law and Practice, inheritance tax with wills and trusts, property taxes with conveyancing. Put it in the middle of your plan, late enough that the host subjects are in place and early enough to repeat the questions twice before the exam; the 12-week plan shows where that falls. The key numbers post keeps the tax deadlines alongside the rest of the exam's figures, and the free questions by subject let you calibrate on the three host subjects before you buy anything. Whatever notes you use, check the date they state the law at: the January 2027 specification changes rewrote how tax figures appear, and a question bank written for the old rule will train you to memorise numbers you will be given.
