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When I took my exams, the Chelmsford centre was Riverside Leisure Centre. It’s a big sports hall, the ventilation system is a bit noisy, and you sit on cheap plastic uncomfortable chairs.
For my last exam the leisure centre for was being refurbished, so I went to one of the main hotels to take my exam instead, which was luxury!
My understanding is that after you’ve worked out the income tax, any remaining basic rate band is then used towards the capital gain @ 10%, then the excess is charged at 20%. Different rates for residential property that didn’t qualify for PPR relief. And remember to apply the annual tax allowance to the capital gain.
I took most of my exams at this centre, and it was always at the Maidstone Leisure Centre.
Maidstone Leisure Centre
Mote Park, Maidstone ME15 7RN
01622 220232It takes place in the large sports hall, which I didn’t find the most conducive place to concentrate! I always brought a cushion with me to make the cheap plastic chairs more comfortable.
Thanks for your reply. I understand. For the record, I had no intention of helping her, or relaying your response. I don’t know her daughter, and the mother is just a colleague I was chatting to briefly. I was just curious for my own sake! But it’s ok, I realize it’s not for an exam, so it’s not fair to expect you to answer it. Thanks again.
@neilsolaris said:
Would I be correct in saying that June 2017 is the date that Scott should register? £5000 * 6 + £8400 + £8600 + £8800 + £9600 +£10000 + £10200 = £85,600. The month before the total would be £85600 + £5000 – £10200 = £80,400.But does he have 30 days in which to register, which takes him up to 1st of August, as per the answer? I would have thought it would be 30th of June though!
Would I be correct in saying that June 2017 is the date that Scott should register? £5000 * 6 + £8400 + £8600 + £8800 + £9600 +£10000 + £10200 = £85,600. The month before the total would be £85600 + £5000 – £10200 = £80,400.
Thanks very much for answering my question. You put it in such a simple and logical way that I’m kicking myself for not working it out myself now!
While you’re waiting for the lecture to reply, can I have a stab please?
As a basic rate tax rate tax payer you receive no benefit. However, it pushes up the higher and additional rate bands by the gross amount of your donation.
For example, let’s say you donate £80. You are assumed to have paid at least £20 tax on this amount, and the government gives this amount to the charity under the gift aid scheme. If you don’t pay any tax then you shouldn’t agree to donate gift aid.
Using the same example, the higher and additional tax bands will be extended by £100, the gross amount. Therefore, a 40% taxpayer will be £20 better off (£100 * (0.4 – 0.2)), and a 45% tax payer will be £25 better off (£100 * (0.45 – 0.2)). Their benefit will happen following their next tax return, unless they make a claim for it sooner.
Hi David,
I’m glad it helped, and that your exam went well. I can’t remember what I produced for the P1 exam. Unfortunately I don’t currently have access to my documents I prepared for that exam.
By the way, if you’re wondering why the government contributes 20%, I can try to explain.
What they are effectively doing is refunding tax on the amount you are contributing/gifting. It is presumed that you already paid tax on this figure at some point, at at least 20%. As the various bands are extended by this gross amount, higher and additional tax payers effectively receive tax relief at their tax rate.
In the case of pensions, governments want to encourage people to pay into a pension scheme, so by refunding tax provides an incentive. Likewise, they want to encourage charitable donations (in this case the charity receives the gross figure, and the person’s bands are extended by the gross amount, so no benefit to the person if you’re a basic rate tax payer, but benefit to the charity).
When you prepare a tax calculation, you start by entering all the figures gross, and then calculate the tax on these figures to get a tax liability. Then by subtracting tax already paid, you reach the tax payable figure.
In terms of the pension, if you make a contribution, the government automatically pay in 20% of your gross contribution. Therefore, if you pay in £80, the government will pay £20 which is 20% of £100 (the gross figure).
From memory, gift aid donations extend the bands (basic rate etc) by the gross amount. Again, the government pays 20% of the gross amount.
Dividends are a similar rule, but come with a 10% credit. Sometime else can give more details because I’m a bit hazy now!
Edit: I just had a quick research. I think the dividend rules may have changed a bit. But what learnt, and I could be wrong) was that companies deducted 10% tax at source. So if you were due a dividend of £100, you would receive £90. You would gross it up to £100, and pay tax at whatever rate you pay tax at. Then subtract £10 at the end to reach tax payable. As you see, if you are a basic rate tax payer, you’ll have no further tax to pay.I was in your position before the June exam, and I was amazed to pass it! It’s true it’s very time pressured (needlessly so in my opinion), but I think you need to complete as much as you can from each of the three questions in order to gain the necessary marks.
Also, don’t neglect the the discursive part, especially in question one. Set out the answer properly (report, memo etc) to gain the professional marks. Also, read the question very carefully to ensure you understand exactly what’s being asked, because often it’s not at all obvious. My view is, if you make sufficient valid points in your answer, you’ll get the necessary points you need in order to pass the paper. So focus on the process of answering the question, rather than worrying too much about obtaining the prefect result, if that makes sense.
I answered this exact question the other day, a few post further down the forum list. You’ve already got the answer to your question now, but here’s my reply to the other person, if it’s any help.
I think it’s 114 months.
You don’t count the number of months that are actually occupied. You also don’t count periods when working abroad, for any number of months. Nor do you count the last 18 months, as long as there has been previous occupation at some point.
That only leaves 4.5 years of absence. As he owned the house for 14 years that’s 9.5 years of deemed occupation. 9.5 x 12 (months) = 114.
From memory, this is an easy way to decide.
Buying contract currency – call option. Selling contract currency – put option
The contract currency is the one usually in brackets (often referred to as contract currency).
I got this from John’s lectures, but you should check to make sure I’m right (I might well not be).
I used the BPP study text and practice and revision book. Some say that the study text is too lengthy, but I wanted to be sure I covered everything.
All I remember now is that question 1 was an investment appraisal, involving two overseas subsidiaries.
If you scroll down to “September 2017 exam was…” some people give details of the other questions.
I believe it’s a 7 year rule, which applies to the professorial level papers only, not the fundamental level or pers.
@derick90 said:
Thank you @secondstar .From your explanation i realize a Revaluation Gain on an Asset is not a Statement of Profit or Loss item and that explains why it is not adjusted out from the Operating Activities. But supposing it was impairment suffered by the Asset, would it be adjusted out under the operating Activities?I think an impairment would need to be adjusted out, unless the impairment was just canceling a previous revaluation gain. Similarly, I think a revaluation gain should be adjusted out of it cancels a previous impairment (i.e. it appears on the income statement). I’m not 100% sure though, so it would be good if someone can clarify it.
@secondstar said:
@derick90
Cash Flow Statement contains only those transactions and events which eventually resulted in movement of cash.
Gain on Revaluation is NOT a cash item at all. In fact it is not a realised gain yet, that’s why its called Unrealised Gain. It will only be realised when the revalued asset is sold. Till then, there’s no movement of cash.Hope it helps.
But derick90 rightly pointed out that depreciation is not a cash flow either, yet it appears on the indirect cash flow calculation to reach net operating flows. I think I explained why before.
@derick90 said:
Hey guys, just asking; why don’t we adjust out Revaluation Gains under the operating Activities as we do for depreciation in the preparation of the Statement of Cash flows?
Thank you.I think I know the answer. With the indirect method of calculating the cashflow, we start by taking the PBIT figured. We adjust it for non cash items that contribute to that figure (i.e. figures that appear above the PBIT). Depreciation is one such figure. However, if memory serves me, the double entry for revaluation gain is dr property, cr OCI. Therefore, this figure doesn’t need to be taken into account, because it falls below the PBIT figure, so no adjustment is necessary.
Edit: Having said that, if the revaluation gain cancels a previous loss, it would go through the income statement, so I guess that would need to be cancelled out.
While you’re waiting for a reply from the tutor, can I try to answer it please?
If they started trading on 01.01.2017, and their first accounting period was, say, 16 months (to 30.04.2018) there would be no accounting period ending in the tax year 06.04.2017 to 05.04.2018. Therefore the second accounting period would be the same as the tax year. I don’t know if this rule applies to the example you gave, as you didn’t give the year the accounts were prepared to.
