Acca F6
ACCA F6
Taxation FA 2010
Exam paper
• 3 hours long • 15 minutes reading time • 5 compulsory questions
Q1 – Income Tax Q2 – Corporation Tax Q3 – Capital Gains Tax / Chargeable gains Q4 & Q5 – Any other area of the syllabus Minimum of 10 marks on VAT
INCOME TAX COMPUTATION AND PROPERTY INCOME
Income tax overview
• Tax year 6 April – 5 April
• 2010/11 • Calculate taxable income for tax year • Calculate income tax thereon
Taxable income
Income assessable Profits from a trade, profession or vocation (other income) Basis of assessment Tax adjusted profits of the accounts ending in the current tax year
Interest received from UK sources (savings income)
Income from employment (other income)
Dividend income Property income (other income)
Income received in the tax year
Rental profits accruing in the tax year
Grossing up
Interest received × 100/80 Dividends received × 100/90
Credit given against income tax liability for tax suffered at source and 10% dividend tax credit
Note: Some interest is received gross, namely interest from Government stock, Treasury stock, Exchequer stock and the National Savings and Investments (NS&I) Bank.
Exempt income
• Premium Bond prizes
• Betting/gambling winnings • Returns on NS&I Certificates • Income from ISAs
Income tax computation
Income tax computation
Tax credits on dividends
• Tax credits on dividends are never repayable
• Offset against IT liability first
– to allow other tax credits to generate a repayment
Deductions
Reliefs
• Qualifying interest
– Employees: interest on loans to purchase P&M for use in employment – Partners: interest on loans to purchase shares or invest in partnership
• Trading losses
Deductions
Personal allowances
• Standard PA = £6,475 (2010/11) • Personal age allowance (PAA)
– – – – 65+ at any time in tax year restricted if ANI exceeds £22,900 restriction = 50% × (ANI − £22,900) minimum PAA = £6,475
Adjusted net income
Taxation FA 2010
Exam paper
• 3 hours long • 15 minutes reading time • 5 compulsory questions
Q1 – Income Tax Q2 – Corporation Tax Q3 – Capital Gains Tax / Chargeable gains Q4 & Q5 – Any other area of the syllabus Minimum of 10 marks on VAT
INCOME TAX COMPUTATION AND PROPERTY INCOME
Income tax overview
• Tax year 6 April – 5 April
• 2010/11 • Calculate taxable income for tax year • Calculate income tax thereon
Taxable income
Income assessable Profits from a trade, profession or vocation (other income) Basis of assessment Tax adjusted profits of the accounts ending in the current tax year
Interest received from UK sources (savings income)
Income from employment (other income)
Dividend income Property income (other income)
Income received in the tax year
Rental profits accruing in the tax year
Grossing up
Interest received × 100/80 Dividends received × 100/90
Credit given against income tax liability for tax suffered at source and 10% dividend tax credit
Note: Some interest is received gross, namely interest from Government stock, Treasury stock, Exchequer stock and the National Savings and Investments (NS&I) Bank.
Exempt income
• Premium Bond prizes
• Betting/gambling winnings • Returns on NS&I Certificates • Income from ISAs
Income tax computation
Income tax computation
Tax credits on dividends
• Tax credits on dividends are never repayable
• Offset against IT liability first
– to allow other tax credits to generate a repayment
Deductions
Reliefs
• Qualifying interest
– Employees: interest on loans to purchase P&M for use in employment – Partners: interest on loans to purchase shares or invest in partnership
• Trading losses
Deductions
Personal allowances
• Standard PA = £6,475 (2010/11) • Personal age allowance (PAA)
– – – – 65+ at any time in tax year restricted if ANI exceeds £22,900 restriction = 50% × (ANI − £22,900) minimum PAA = £6,475
Adjusted net income