(i) ACCA F6 TAXATION

32 Pages·2017·0.4 MB·English

ACCA

F6 TAXATION
(UNITED KINGDOM)

REVISION QUESTION BANK

Finance Act 2016
Applicable to Examinations from June 2017 to March 2018

®
©2017 DeVry/Becker Educational Development Corp.  All rights reserved. (i)
No responsibility for loss occasioned to any person acting or refraining from action as a result of any
material in this publication can be accepted by the author, editor or publisher.
This training material has been prepared and published by Becker Professional Development
International Limited: www.becker.com/acca

Copyright ©2017 DeVry/Becker Educational Development Corp. All rights reserved.
The trademarks used herein are owned by DeVry/Becker Educational Development Corp. or their
respective owners and may not be used without permission from the owner.
No part of this training material may be translated, reprinted or reproduced or utilised in any form either
in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented,
including photocopying and recording, or in any information storage and retrieval system without
express written permission. Request for permission or further information should be addressed to the
Permissions Department, DeVry/Becker Educational Development Corp.

Acknowledgement
Past ACCA examination questions are the copyright of the Association of Chartered Certified
Accountants and have been reproduced by kind permission.
(ii) ©2017 DeVry/Becker Educational Development Corp.  All rights reserved.
REVISION QUESTION BANK – TAXATION (UK) (F6)
CONTENTS
Question Name Page Answer Marks Date worked

Tax Rates and Allowances (vi)

OBJECTIVE TEST QUESTIONS1

1 General Concepts and Principles 1 1001 18
2 Income Tax Computations 3 1002 16
3 Property and Investment Incomes 5 1003 12
4 Employment Income 6 1003 14
5 Unincorporated Traders –
Assessment and Profits 8 1004 10
6 Capital Allowances 9 1005 12
7 Unincorporated Traders –
Relief for Trading losses 11 1006 12
8 Unincorporated Traders – Other Matters 12 1007 12
9 Chargeable Gains – Basic Principles 14 1008 28
10 Chargeable Gains –
Chattels, Land and Buildings 17 1009 12
11 Chargeable Gains – Shares 19 1010 8
12 Chargeable Gains – Business Assets 20 1010 12
13 Corporation Tax – The Tax Computation 21 1011 10
14 Corporation Tax – Loss Reliefs 23 1011 10
15 Corporation Tax – Groups of Companies 24 1012 10
16 Inheritance Tax 26 1012 22
17 NIC, PAYE and Self-assessment 28 1013 18
18 Tax Compliance 31 1014 16
19 Value Added Tax 33 1015 26

CONCEPTS AND PRINCIPLES

1 Aspects of a Tax System 37 1017 10
2 Shiv and Shanker 37 1018 10

INCOME TAX AND NIC LIABILITIES

3 Bayle Defender (ACCA J11) 38 1019 10
4 Josie Jones (ACCA D12) 38 1020 15
5 Sophia Wong (ACCA D12) 40 1021 10
6 John Beach (ACCA J13) 40 1023 15
7 Phil Jones (ACCA J13) 41 1024 10
8 Richard Feast (ACCA D13) 42 1025 15
9 Fang and Hong (ACCA D13) 44 1027 10
10 KLM and Richard Morris (ACCA D13) 44 1028 10
11 Chi Needle (ACCA J14) 45 1029 10
12 Qi Pin (ACCA J14) 46 1030 15
13 Alfred King (ACCA D14) 48 1031 15
14 Edward King (ACCA D14 *) 49 1033 10

1 All OT questions are 2 marks each unless otherwise indicated.
©2017 DeVry/Becker Educational Development Corp.  All rights reserved. (iii)
TAXATION (UK) (F6) – REVISION QUESTION BANK
Question Name Page Answer Marks Date worked

INCOME TAX AND NIC LIABILITIES (continued)

15 Sophie Shape (ACCA J15 Specimen) 50 1034 10
16 Fergus (ACCA J15) 51 1035 10
17 Wai (ACCA J15) 51 1036 15
18 Daniel, Francine and Gregor (ACCA S15) 52 1037 10
19 Samson & Delilah (ACCA D15) 53 1038 15
20 George (ACCA M16) 54 1040 10
21 Patience (ACCA M16) 55 1041 15
22 Stevie Dee 56 1043 10
23 Basil and Yoko 57 1044 15

CHARGEABLE GAINS FOR INDIVIDUALS

24 Winston King (ACCA J12 *) 57 1045 10
25 Aom and Leroy (ACCA D13 *) 59 1046 10
26 Mick Stone (ACCA J14 *) 60 1047 10
27 Patrick and Emily Grant (ACCA D14 *) 61 1048 10
28 Ruby (ACCA D15) 63 1049 10
29 Jerome (ACCA M16) 64 1050 10

INHERITANCE TAX

30 Sam Shire (ACCA D12 *) 64 1051 10
31 Pere Jones (ACCA J13 *) 65 1052 10
32 Afiya (ACCA D13 *) 67 1053 10
33 Kendra Older (ACCA J14 *) 68 1053 10
34 Tobias (ACCA D14 *) 69 1054 10
35 Zoe (ACCA J15) 71 1055 10
36 Marcus (ACCA D15) 71 1056 10
37 James (ACCA J16) 72 1057 10

* These have been adapted to the style of “OT-case” questions that now feature in Section B of
the examination.
CORPORATION TAX

38 Black Ltd (ACCA D11) 73 1059 10
39 Heavy Ltd (ACCA J12) 74 1060 10
40 Soft Ltd and Greenstew Ltd (ACCA J12) 75 1061 10
41 Greenzone Ltd (ACCA J13) 76 1062 10
42 Opal Ltd (ACCA J13) 77 1063 10
43 Softapp Ltd (ACCA D13) 78 1064 15
44 Long Ltd (ACCA J14 *) 79 1066 10
45 E-Commerce plc (ACCA D14) 81 1067 15
46 Cairo Ltd and Kigali Ltd (ACCA D14 *) 83 1068 10
47 Retro Ltd (ACCA J15) 85 1069 15
48 Lucky Ltd (ACCA S15) 87 1071 13
49 Jump Ltd (ACCA J16) 88 1073 15
(iv) ©2017 DeVry/Becker Educational Development Corp.  All rights reserved.
REVISION QUESTION BANK – TAXATION (UK) (F6)
Question Name Page Answer Marks Date worked
CHARGEABLE GAINS FOR COMPANIES

50 Wiki Ltd (ACCA J12 *) 90 1074 10
51 Acebook Ltd (ACCA D12 *) 91 1075 10
52 Luna Ltd (ACCA J15) 93 1076 10

VALUE ADDED TAX

53 Flick Pick (ACCA J12 *) 93 1077 10
54 Clueless Ltd (ACCA D12 *) 95 1078 10
55 Richard Famine (ACCA D13 *) 96 1079 10
56 Wrong Ltd (ACCA J14 *) 98 1080 10
57 DEE-Commerce plc (ACCA D14 *) 100 1081 10
58 Zim (ACCA J15) 101 1081 10
59 Smart Ltd (ACCA S15) 102 1082 10
60 Garfield (ACCA J16) 103 1083 10

The format of the Examinations is as set out below.
Specimen Exam (applicable from September 2016)
Section A 15 Objective Test (OT) questions 105 1085 30
Section B “OT-case” questions
16-20 Delroy and Marlon 109 1085 10
21-25 Opal 110 1085 10
26-30 Glacier Ltd 111 1086 10
Section C “Constructed response” questions
31 Sarah 113 1086 10
32 Simon 114 1087 15
33 Naive Ltd 115 1089 15

September 2016 Exam
Section A 15 Objective Test (OT) questions 117 1091 30
Section B “OT-case” questions
16-20 Adana 121 1092 10
21-25 Kitten and Kat Ltd 122 1092 10
26-30 Alisa 123 1092 10
Section C “Constructed response” questions
31 Joe 125 1093 10
32 Ashura 125 1094 15
33 Tenth Ltd and Eleventh Ltd 127 1095 15

©2017 DeVry/Becker Educational Development Corp.  All rights reserved. (v)
TAXATION (UK) (F6) – REVISION QUESTION BANK
Question Name Page Answer Marks Date worked
December 2016 Exam
Section A 15 Objective Test (OT) questions 129 1098 30
Section B “OT-case” questions
16-20 Zoyla 133 1100 10
21-25 Roman and Paris 134 1100 10
26-30 Ardent Ltd 135 1100 10
Section C “Constructed response” questions
31 Jack 137 1101 10
32 Array Ltd 138 1102 15
33 Wretched Ltd 139 1103 15

OBJECTIVE TEST QUESTION PRACTICE FOR COMPUTER BASED EXAMINATIONS

This section includes OT question types that will appear only in a computer-based exam, but
provides valuable practice for all students whichever version of the exam they are sitting.
(vi) ©2017 DeVry/Becker Educational Development Corp.  All rights reserved.
REVISION QUESTION BANK – TAXATION (UK) (F6)
The following supplementary instructions will be included in the exams to 31 March 2018:
SUPPLEMENTARY INSTRUCTIONS
 Calculations and workings need only be made to the nearest £.
 All apportionments should be made to the nearest month.
 All workings should be shown in Section C.
TAX RATES AND ALLOWANCES
The following tax rates and allowances are to be used in answering the questions.
Income tax
Normal Dividend
rates rates
Basic rate £1 – £32,000 20% 7.5%
Higher rate £32,001 – £150,000 40% 32.5%
Additional rate £150,001 and over 45% 38.1%
Savings income nil rate band – Basic rate taxpayers £1,000
– Higher rate taxpayers £500
Dividend nil rate band £5,000
A starting rate of 0% applies to savings income where it falls within the first £5,000 of taxable income.
Personal allowance
Personal allowance £11,000
Transferable amount £1,100
Income limit £100,000

Residence status
Days in UK Previously resident Not previously resident
Less than 16 Automatically not resident Automatically not resident
16 to 45 Resident if 4 UK ties (or more) Automatically not resident
46 to 90 Resident if 3 UK ties (or more) Resident if 4 UK ties
91 to 120 Resident if 2 UK ties (or more) Resident if 3 UK ties (or more)
121 to 182 Resident if 1 UK tie (or more) Resident if 2 UK ties (or more)
183 or more Automatically resident Automatically resident

Child benefit income tax charge
Where income is between £50,000 and £60,000, the charge is 1% of the amount of child benefit
received for every £100 of income over £50,000.
Car benefit percentage
The relevant base level of CO emissions is 95 grams per kilometre.
2
The percentage rates applying to petrol cars with CO emissions up to this level are:
2
50 grams per kilometre or less 7%
51 grams to 75 grams per kilometre 11%
76 grams to 94 grams per kilometre 15%
95 grams per kilometre 16%
©2017 DeVry/Becker Educational Development Corp.  All rights reserved. (vii)
TAXATION (UK) (F6) – REVISION QUESTION BANK
Car fuel benefit
The base figure for calculating the car fuel benefit is £22,200.
Individual savings accounts (ISAs)
The overall limit is £15,240.
Pension scheme limits
Annual allowance – 2014–15 to 2016–17 £40,000
– 2013–14 £50,000
Minimum allowance £10,000
Income limit £150,000
The maximum contribution that can qualify for tax relief without any earnings is £3,600.
Authorised mileage allowances: cars
Up to 10,000 miles 45p
Over 10,000 miles 25p
Capital allowances: rates of allowance
Plant and machinery
Main pool 18%
Special rate pool 8%

Motor cars
New cars with CO emissions up to 75 grams per kilometre 100%
2
CO emissions between 76 and 130 grams per kilometre 18%
2
CO emissions over 130 grams per kilometre 8%
2

Annual investment allowance
Rate of allowance 100%
Expenditure limit £200,000

Cap on income tax reliefs
Unless otherwise restricted, reliefs are capped at the higher of £50,000 or 25% of income.
Corporation tax
Rate of tax 20%
Profit threshold £1,500,000

Value added tax (VAT)
Standard rate 20%
Registration limit £83,000
Deregistration limit £81,000
(viii) ©2017 DeVry/Becker Educational Development Corp.  All rights reserved.
REVISION QUESTION BANK – TAXATION (UK) (F6)
Inheritance tax: tax rates
£1 – £325,000 Nil
Excess – Death rate 40%
– Lifetime rate 20%
Inheritance tax: taper relief
Years before death Percentage
reduction
Over 3 but less than 4 years 20%
Over 4 but less than 5 years 40%
Over 5 but less than 6 years 60%
Over 6 but less than 7 years 80%

Capital gains tax
Normal Residential
rates property
Rates of tax – Lower rate 10% 18%
– Higher rate 20% 28%
Annual exempt amount £11,100
Entrepreneurs’ relief – Lifetime limit £10,000,000
− Rate of tax 10%

National insurance contributions

Class 1 Employee £1 to £8,060 per year Nil
£8,061 to £43,000 per year 12%
£43,001 and above per year 2%
Class 1 Employer £1 to £8,112 per year Nil
£8,113 and above per year 13.8%
Employment allowance £3,000
Class 1A 13.8%
Class 2 £2.80 per week
Small profits threshold £5,965
Class 4 £1 to £8,060 per year Nil
£8,061 to £43,000 per year 9%
£43,001 and above per year 2%
Rates of interest (assumed)
Official rate of interest 3%
Rate of interest on underpaid tax 3%
Rate of interest on overpaid tax 0.50%
©2017 DeVry/Becker Educational Development Corp.  All rights reserved. (ix)
REVISION QUESTION BANK – TAXATION (UK) (F6)
MCQs 1 GENERAL CONCEPTS AND PRINCIPLES
1.1 Which of the following UK taxes is an indirect tax?
A Capital gains tax
B Inheritance tax
C National insurance contributions
D Value added tax
1.2 Which of the following is responsible for the assessment and collection of UK taxes?
A Commissioners for Revenue and Customs
B HM Revenue and Customs
C HM Treasury
D Inland Revenue

1.3**1 Topaz is a sole trader.
Which of the following actions by Topaz would be tax evasion?
(1) Failing to record cash sales
(2) Claiming personal expenses through the business
(3) Understating the value of closing inventory
(4) Postponing a sale of shares from 5 April until 6 April
A 1 only
B 2 and 3 only
C 1, 2 and 3 only
D 1, 2, 3 and 4
1.4 Having graduated from a university in the UK, Patrick is now working full-time overseas. He
now wishes to be non-resident in the UK but expects to make return trips to the UK to visit
friends.
What is the maximum number of days Patrick can spend in the UK and be non-
resident?
A 15
B 45
C 90
D 120

1.5 Which of the following people would be treated as automatically non-resident in the UK
for the tax year 2016–17?
A Anna, who stayed in the UK for 15 days during the tax year 2016–17
B Barbara, who was not previously UK resident and stayed in the UK for 50 days
during the tax year 2016–17
C Carol, who was UK resident for the tax year 2014–15 and stayed in the UK for 40
days during the tax year 2016–17
D Danita, who stayed in the UK for 70 days during the tax year 2016–17, and who has
left the UK to carry out part-time work overseas

1 Questions highlighted ** are also presented in the supplement at the end of this Revision Question Bank as OT
types applicable only to computer based exams.
©2017 DeVry/Becker Educational Development Corp.  All rights reserved.  1