*** ACCA F6 June 2017 Exam was.. Instant Poll and comments ***

@ratanasoff said:
But why not 300,000 x 4/12 x 0.03? As long as I remember it was written something about accrued interest over the amount of 300,000.

250,000 x 4/12 x 0.03 … the bond was for 250,000 I think it’s irrelevant that she paid 300,000 for them

@amanicma said:
As I recall
The bond was bought on the 1st of July and sold on the 31st October 2017
The bond nominal value is GBP 250,000 with interest rate 3%
The bond was sold by premium for the amount of GBP 302,500
And the interest income was included in the selling price
Acordingly ,
GBP 250,0000 the bond nominal value
GBP 2,500 interest income for 4 months and
GBP 50,0000 capital gains

surely there would be no capital gains though, as she bought them for £300,000? bought for £300,000 and sold for £302,500 – so gains of £2,500 which was for accrued income
Thanks

I can’t remember that the bond was bought by GBP 300,000
Anyway, if it was bought with the aforementioned amount
For sure there is no capital gains ??

@amanicma said:
As I recall
The bond was bought on the 1st of July and sold on the 31st October 2017
The bond nominal value is GBP 250,000 with interest rate 3%
The bond was sold by premium for the amount of GBP 302,500
And the interest income was included in the selling price
Acordingly ,
GBP 250,0000 the bond nominal value
GBP 2,500 interest income for 4 months and
GBP 50,0000 capital gains

Thanks

Gilts are exempt from CGT!

Does anyone remember the answer to the question in section B regarding deemed occupation?

I went for first one deemed as up to 4 years elsewhere in the U.K. Second one not occupied

@khaloodk said:
Same!

Oh no 🙁 That’s another one wrong for me then… Why did you think the second one was not occupied? I thought that she lived with her parents hence up to 3 years for any reason? 🙁

@aiamakki said:
I think both of them are not as he stayed 4 years in UK but he did not return back before sale

Oh that’s right! I completely forgot to check if she returned to live there… 🙁 Oh well… There is always September…

The entertaining of overseas customers is allowed but not customers in the UK. Additionally, the other part of that question asked about which impairment loss(bad debt was applicable.) The 520 from August is correct. It has to be older than 6 months to be written off.

Question 1 – Indirect tax was a giveaway. VAT

Also you had to notice in the inheritance tax question that the gift was given to her granddaughter so the answer was to skip a generation.

A lot of the answers centered around the earlier chapters to some extent. Hope I made it this time.

Did anyone get the answer to who would go to the Tribunal?

Also, that last question in Section A ( NIC) was difficult to get the answer. I know the 3,000 Employer’s allowance would apply but when you multiply the salary of the two employees for class 1 Secondary at 13.8% and leaving off the benefit of 2250 you just had difficulty getting the answer.

Any feed back?

@dicky123 said:
Hi all, I found the exam ok on the face of it but there were traps everywhere.
The q about deemed occupation I can’t remember the options but i put A. It said he couldn’t return to the house by reason of his employment, so even though he didn’t physically return it is still classed as deemed occupation, it’s one of those techy rules.
The iht one about skipping a generation – I put that first but then changed it to “reduces inheritance tax payable”. The q said what advantage would there be giving it as a lifetime gift rather than death estate. The skipping generation answer applies to both, but I think the q was about taper relief and the fact that there is a reduction to the iht payable giving the gift during her lifetime which would not be the case for death estate.
The employer made pension contributions since 2009 so she was part of a scheme. Employer contributions count towards the annual allowance. I made it that the Allowance in 16/17 was tapered to £10k the c/f was £20k, cos can c/f 3 years.
Accrued income : 4/12x (3%x 250,000)
Agreed the 1st question was a giveaway – A indirect tax.
I found the 2 15 mark questions ok but hated the 10 mark one. I forgot the annual exemption in the rollover relief question about how much capital gains tax he saves by claiming rollover relief.
Hope we’ve all done enough to get to
50!

i did exactly the same in all ques..!! hope we pass..!! section B was too tricky for me

Petula has been employed as a sales manager by Downtown plc since 6 April 2009. The following information is
available in respect of the tax year 2016–17:
(1) During the tax year 2016–17, Petula was paid a gross annual salary of £230,000.
(2) In addition to her salary, Petula has been paid the following bonuses by Downtown plc:
Amount Date of payment Date of entitlement In respect of the six-month
£ period ended
21,200 30 April 2016 1 April 2016 31 December 2015
18,600 31 October 2016 1 October 2016 30 June 2016
22,400 30 April 2017 1 April 2017 31 December 2016
(3) During the tax year 2016–17, Petula used her private motor car for both private and business journeys. The total
mileage driven by Petula throughout the tax year was 26,000 miles, with all of this mileage reimbursed by
Downtown plc at the rate of 60p per mile. However, only 21,000 miles were in the performance of Petula’s
duties for Downtown plc.
(4) Petula pays an annual professional subscription of £630 which is relevant to her employment with Downtown
plc. Petula also pays an annual subscription membership fee of £1,840 to a golf club which she uses to entertain
Downtown plc’s clients. Downtown plc does not reimburse Petula for either of these costs.
(5) During the tax year 2016–17, Petula paid interest of £140 on a personal loan taken out on 6 April 2016 to
purchase a computer for sole use in her employment with Downtown plc.
(6) Each tax year since 6 April 2009 (including the tax year 2016–17), Downtown plc has contributed £30,000
into the company’s HM Revenue and Customs’ registered money purchase occupational pension scheme on
Petula’s behalf. Petula has never personally made any pension contributions.
(7) Petula owns a freehold house which was let out furnished throughout the tax year 2016–17. The total amount
of rent received during the tax year was £12,000.
During August 2016, Petula purchased a new washer-dryer for the property at a cost of £730. This was a
replacement for an old washing machine which was scrapped, with nil proceeds. The cost of a similar washing
machine would have been £420.
During November 2016, Petula purchased a new dishwasher for the property at a cost of £580. The property
did not previously have a dishwasher.
The other expenditure on the property for the tax year 2016–17 amounted to £1,640, and all of this is allowable.
(8) During the tax year 2016–17, Petula rented out one furnished room of her main residence. During the year, she
received rent of £8,900 and incurred allowable expenditure of £2,890 in respect of the room. Petula always uses
the most favourable basis as regards the tax treatment of the furnished room.
(9) On 1 July 2016, Petula purchased £250,000 (nominal value) of gilts paying interest at the rate of 3% for
£300,000. Interest is paid half-yearly on 30 June and 31 December based on the nominal value. Petula sold
the gilts on 31 October 2016 for £302,500 (including accrued interest).
Required:
(a) Calculate Petula’s taxable income for the tax year 2016–17.
Note: Your computation should list all of the items referred to in notes (1) to (9), indicating with the use of
zero (0) any items which are not taxable or deductible. (12 marks)
(b) Advise Petula of the total amount of her unused pension annual allowances which are available to carry
forward to the tax year 2017–18.

Section C – ALL THREE questions are compulsory and MUST be attempted
Please write your answers to all parts of these questions on the lined pages within the Candidate Answer Booklet.
31 You should assume that today’s date is 15 December 2016.
Zhi has been self-employed since 2000, preparing accounts to 31 December. On 1 December 2016, Zhi purchased
a new freehold warehouse for £164,000 for use in his business, but this purchase has resulted in Zhi having cash
flow problems. He has various tax payments becoming due over the next two months, and would like to reduce or
postpone these payments as much as possible.
Income tax and national insurance contributions (NICs)
Zhi’s income tax liabilities and class 4 NICs for the tax years 2014–15, 2015–16 and 2016–17 are, or are forecast
to be:
2014–15 2015–16 2016–17
£ £ £
Income tax liability 25,200 27,600 18,000
Class 4 NICs 4,084 4,204 3,724
Zhi has not made any claims to reduce his payments on account.
Capital gains tax (CGT)
Zhi has a CGT liability of £12,980 becoming due for payment on 31 January 2017. This is in respect of a freehold
office building which was sold for £210,000 on 10 December 2015, resulting in a chargeable gain of £76,000. The
office building had always been used for business purposes by Zhi.
Zhi is a higher rate taxpayer. No claim has been made for rollover relief.
Value added tax (VAT)
Zhi has forecast that he will have to pay VAT of £20,200 on 7 February 2017 to HM Revenue and Customs (HMRC)
in respect of the VAT quarter ended 31 December 2016.
On 12 December 2016, Zhi despatched goods relating to an exceptionally large credit sale of standard rated goods
of £45,600 (inclusive of VAT). He has not yet issued a sales invoice for this sale.
Because the customer is unlikely to pay until 28 February 2017, Zhi is considering not issuing a sales invoice until
1 February 2017.
PAYE and NICs
Zhi will have to pay PAYE and NICs of £5,724 electronically on 22 January 2017 to HMRC in respect of his two
employees for the tax month running from 6 December 2016 to 5 January 2017.
This includes amounts for bonuses which Zhi was planning to pay to his two employees on 1 January 2017, but
could delay payment until 10 January 2017. The bonuses are in respect of the year ended 31 December 2016, and
they will be treated as being received on whichever is the date of payment.
The first employee has a gross annual salary of £20,000 and is to be paid a bonus of £1,500. The second employee
has a gross annual salary of £55,000 and is to be paid a bonus of £5,000.
6
Required:
(a) Calculate the amount by which Zhi can claim to reduce his self-assessment income tax and NICs due for
payment on 31 January 2017 without incurring interest or penalties. (2 marks)
(b) Calculate the amount by which Zhi’s CGT liability due for payment on 31 January 2017 will be reduced if
he makes a claim for rollover relief based on the warehouse purchased on 1 December 2016 for £164,000.
(3 marks)
(c) Explain whether Zhi can reduce the amount of VAT payable on 7 February 2017 by not issuing a sales
invoice for the credit sale of £45,600 until 1 February 2017, and, if so, by how much the payment will be
reduced. (2 marks)
(d) Calculate the amount by which Zhi’s PAYE and NICs due on 22 January 2017 will be reduced if he delays
the payment of employee bonuses until 10 January 2017, and state when the postponed amount will be
payable.
Note: Your calculations should be based on annual income tax and NIC thresholds.