*** ACCA P6 December 2016 Exam was.. Instant Poll and comments ***

I started off with the ethic question as it was a tutor’s tip so knew it would come up. I should get about 5 marks for this as very straight forward. Plus 2 professional for memorandum and a letter. But others, God please help me pass this last one 🙂

@usamaniaz said:
who understood Q1 part A? like what exactly had to be done there.
that was so vague.

You just had to compare post tax income’s of trading as a sole trader or as an incorporated business for the 3 years of the new contract.

55000 was the trading profit for the sole trader and the tax adjusted trading profit for the limited company. That’s all they were saying but they say it in such a deceptive way.

So you base all your workings around that figure basically.

THe sole trader has class 2 and 4 ni to pay on the trading profit plus Income tax.

The incorporated business has income tax to pay on the salary and then you need to find out how much dividends you need to reach the BR threshold which means you have to adjust the £55000 and take account of the salary, the class 1 employer’s NI (including the employer’s allowance) and class 1 employee NI. Find the profit after tax figure then pay out dividends net. Then you left with retained profit which is paid out in the same way which means there is no net tax effect on the dividends remaining which means you add it to the post tax income.

I think this is right.

I think I should get at least 14/17 for that question otherwise it’s rigged

I’ve worked hard spent more than 700 hours studied P6 in length, gain the knowledge in the majority of syllabus areas practiced questions from revision kit for more than three times but am afraid I won’t pass this last paper, it’s a horrible feeling to write and explain in this forum but still trying to search an answer from within that what I’ve done wrong in preparation?, would I be able to pass this last paper ever? or should I leave the study here as couldn’t work hard more than I did and happy to be called as Part Qualified for the rest of the life.

In the examination hall everything went blur couldn’t understand what questions were asking, panic started and one knows that one is seating there for the sake of passing time.

Congratulations for the students who done well in this exam and wish them good luck for the results.

@adil22 said:
How to calculate nic 4 in q4 part a ?

Class 4 NIC on cessation will apply to any trading profits which have yet to be assessed for the tax.

So use salary and PSA arrangement to work out trading profits for y/e 30 Apr 16 and 8 month period ending 31 Dec 16 when he is to retire. Then deduct the overlap profits of £25000.

Then the usual way: £42385-8060 @ 9% and remainder above the threshold at 2%

Yes I agree with you but think £24k was his salary and £30k was to be the profit after the first three years.

all in all lets face it, the wording was not nice.
but other aspects of the paper was good for me
Q2 for was like a compensation for Q1 lol
Q4 was rather nice. part a b and c but d i was little confused but that was only 2 marks
q5 part a was straightforward unless there was a trick, calculate the benefit and plus class 1a nic at 13.8%
part b was mainly EMI vs CSOP
part c was calculation which wasnt too bad

Looks like you smashed the exam.

Sounds about right.

@rupaljignesh said:
I’ve worked hard spent more than 700 hours studied P6 in length, gain the knowledge in the majority of syllabus areas practiced questions from revision kit for more than three times but am afraid I won’t pass this last paper, it’s a horrible feeling to write and explain in this forum but still trying to search an answer from within that what I’ve done wrong in preparation?, would I be able to pass this last paper ever? or should I leave the study here as couldn’t work hard more than I did and happy to be called as Part Qualified for the rest of the life.

In the examination hall everything went blur couldn’t understand what questions were asking, panic started and one knows that one is seating there for the sake of passing time.

Congratulations for the students who done well in this exam and wish them good luck for the results.

It depends on how well you apply your knowledge to the question.

I would recommend finding as many questions on P6 as possible and keep doing them over and over again.

I don’t know if I passed but I know that what I answered should be 80% right. So if I answered 80% of the paper and got 80% correct, that is 64%.

It’s all about application. You need to think like a tax advisor.

What I do to understand the question is go through the case study and highlight key points and right little notes so I can get a clearer view of how everything links together.

@nickinackynoo1 said:
How does everyone remember the exam? I literally erase it from my brain the minute I leave the exam hall! haha!

Q3 part d(?) I got the group payment arrangements mixed up with installments, I did mention that refunds can be offset against payments saving cash, hopefully got half a mark for that!

I knew nothing about R&D tax relief, I racked my brains but couldn’t think of anything to say! 6 marks gone straight away!

Was Q2 part b(?) about CGT only? As I said it would be better to dispose of the boat now and possibly make use of the losses from the painting, but you would waste the AEA.

I was in ‘unload’ mode when I was answering these questions.

Q3 d) I just went to the general, cash flow benefit, administrative benefits…

R&D is a give away.

Q2 b) omg I forgot this question!!!! How many marks was it? I talked a load of crap. I just said the benefits and drawbacks of doing one thing and doing another.

It’s difficult to tell if I have passed lmao

Q2 the boat was a wasting chattel so no cgt so i said gift it now as the value of it was increasing so for IHT (not that i mentioned that as it was asking for CGT only) purposes it would mean more IHT if left in will. That was my thought process for that.

Also for the first part i talked about the annual exemption of 3k and how its better to gift now as you lock in the value of assets that might increase later and also Fall in value relief is available if on death the value falls of the asset gifted. For Angie i said further information required is: does her husband own any part of the other 30% as if he does this will effect the value of transfer as she will be connected person to her husband so a combined shareholding needs to be calculated, for BPR we needed to know how long she had the shares in the company as you need to hold them for 2 yrs but the question never told you when she bought the shares or when the company was formed.

Q3 a) what was the base cost of the building? I used the new value as at 1st oct (date of transfer to the new company) because the old value would only have been used if the company was still with its old parent. As the company had bought the building of its parent it would have had to pay a degrouping charge as it left within 6 yrs so then you couldn’t possibly use the old base cost as cost? I was very disappointed as i had studied groups at length and was expecting a 35 or 25 mark question rather than this silly little 20 mark question.

For the loss relief i said the loss from the building can be used now against its trading loss but for the pre entry cap loss that has to be offset against its gains on assets sold. was that right?

Q1 part a was a disaster for me. Hopefully i will score method marks for calculating IT and NIC contributions but i won’t be getting any more marks for anything else.

R&D part i thought was quite a lot of marks for what they were asking. I just explained the rules regarding the additional 130% as just because you get the 100% R&D relief to get the additional 130 % additional rules apply, for example on rent you get 100% but you wouldn’t get the additional 130% and same for computer hardware equipment. Also for subcontractor expenses you would get 100% but then only 65% would qualify for the additional 130%. Then i just worked out the 130% on the 12k and 20% and said his post tax income would increase by this amount.

Cap allowance part not a clue, VAT part: has to be transferred as a going concern, the purchaser has to be VAT registered or will become VAT registered and assets transferred have to be used in the same or similar trade that they were being used in before the transfer.

Stupidly i decided to do Q5 and got confused on part a) accommodation allowance even though i had revised it the night before. The bit about Jake not being entitled to it threw me so i missed that part out 🙁 i was kicking myself after the exam as i knew how to work it out.

I took profit of 2016/17 which was 132000 applied % of partner which was 40% then based on the ans I calculated nic 4 9% and 2% is it right or wrong ?

Is this right calculation Chris ?