TX*** F6 December 2011 Exam was: Post your comments and vote in Instant Poll ***

@tick_tock said:
How did you guys answer the last part of question 1? I put down that he should have paid for the full cost of the fuel and used the money left over to pay towards the use of the car.

Did the same. Then showed calculation of the tax saving that would have been possible.

Guys, the paper was full of details. and yeah too much work for just a couple of marks. Q1 Gift Aid and Pension Contributions confused me much. did you include the contribution as net or gross? did you include employer's contribution as well to extend the rate bands for income tax computation?
Q2 was hard, incorporation and cessation all in 1 question, too many details. forgot to exclude VAT from allowances. did not realize it was VAT inclusive :( balancing allowance and charge all in one and losses losses losses
Q3 was ok I think except for PPR which is also rather time consuming.
Q4 was the easiest I think. hope to score on these questions.
Q5 included 3 completely different questions. started doing the one with group loss relief, but did not finish as run out of time. although corporation tax computation with double tax relief would bring a lot of easy marks. IHT wouldn't.
Good luck to all of us. InshAllah will pass with 50 :)

@tick_tock said:
How did you guys answer the last part of question 1? I put down that he should have paid for the full cost of the fuel and used the money left over to pay towards the use of the car.

I did the same like you. Car Fuel benefit applies in full @ 35% because he did not pay all the fuel. The money left over I think it was £4800 I deducted from the £80,000 @ 35%

It was ok as compared to some of the past questions I looked at. Thump up. Hope for the best for all who sat this paper today.
xxx

Found this paper very time pressured! Had a good go at all questions apart from the last one, ran out of time was unable to answer questions on Group losses and DTR/Corp Tax, what the hell was the 2mark question on VAT all about (selling the company etc) The gains question seemed alot easier then Gain questions in past papers. Property wasn't too bad either, Q2 was a little tricky! Hoping I racked up the marks in Q1 some of Q2 Q3 Q4 and IHT Q5, although I know the diminuation rule should have been used as the transfer amount. Nevermind would have only lost a couple of marks for that. Fingers crossed peeps, onto the next one.

@tick_tock said:
How did you guys answer the last part of question 1? I put down that he should have paid for the full cost of the fuel and used the money left over to pay towards the use of the car.

Oh no, really obvious now you say it! I put it all towards offsetting the car benefit.

its not easy though

paper was ok......i attempted 75% only unfortunately , i could have attempted 85% though . anyway if i PASS then i will give credit to my TEACHER.....and my TEACHER is OPENTUITION.COM :)

Does anyone remember if Q5 Corporation tax with DTR was a "repayment"?
Also did anyone get £6000 profit for the PPR in Q3 (i)?
And what about VAT return - did you get amount payable (about £1,600 I think it was)
And the OAP Q1 did you work the 10% tax rate for the first £2440?
Just curious

Was very time pressured. Think i did ok in Q1 but took way too long. Q2 was ok ish, did anyone get £3900 for the capital allowances? I then took them out stating that capital allowances cannot increase a loss(??) Seemed a bit pointless to calculate everything and then not be able to use it? They did that again by including a car from pre april 09 which would have been restricted to £3000 if it were not for the winding up.....
Worked the fuel benefit in q1 at full £18k and suggested he should have paid the full cost of fuel which would have saved £6300 x 50% tax . Also used the full price of the car and then deducted the capital contribution to give £78 (ish). Checked text book and it says restriction to £80k is after capital contributions so hope ive nailed that part.
Q5 i only did part 1 & 3. Think i took all the gain out of the ppr question . Worked out at 172 months occupied which left 38 =£38k . Kinda forgot what the rule was on letting relief so just went with the £38 being the lowest........
Wish all good luck with results;)

paper was quite easy. i attempted 70 marks only n still hoping to pass:).i wasnt good at time management i guess otherwise could have attempted 100 marks. did anyone get 3 gains equal to zero (including PPR relief)? also capital allowance in q.2 was equal to 3600? how do we treat pension income for income tax purpose? we consider it as non saving income or saving? and person getting pension income does he pay any NIC?

I used the 3,200 of the fuel cost and advised that he could make a gift aid donation of the same amount and it would be a gross donation of 4,000 (3,200 * 100/80)
And showed the tax savings cuz of the rate band extension.

Also, the occupational pension scheme DOES NOT extend rate band. It's an allowable deduction in the employment income part. Both by the employer and employee i think.
Even though i was pretty well prepared for it, and the exam wasn't really hard, it was very different

what was the gain on ppr part mine was coming 0. do u people manage to do question 2 i found it bit difficult

No NIC is payable for state pensioners.
Occupational pension scheme does not extend rate band - just deduct from Salary.
I worked the PPR gain as £6000 exact.
I worked the Adjusted trading losses as £159,000 exact
Capital Allowances - no AIA in cessation and both balancing charge/allowances had to be worked
Taxable gains on Painting and Motor Car were both exempt.
Corporation tax computation on Q5 - I ended up with tax repayment.
List price of motor car restricted to £80000 @ 35% (also restricted) and I deducted the £4800 he paid for the use of car from the benefit.
Car fuel £18,000 @ 35% (not all fuel paid so taxable)
Rent a room $4250 not applicable as normal calculation was lower
Lease premium added with Rent Income
Furnishing Lettings (trading rules) I worked Capital allowance on Furniture/kitchen

Did anyone had similar workings? Good luck to all.

was easy....... but too much lengthy nd covers very vast area of course....!!!

joevassalo
you actually answered most of the questions that were tricky and that the guys asked here. I only got some of them right. forgot the limit - 80,000 for price list. extended the income tax rate band with occupation scheme as most of the guys did on the exam, should have deducted from income at source. forgot where I should put the gift aid, which should exceed the rate band. forgot to exclude VAT for purchases for capital allowances calculation. noticed the disposal of main pool assets, when it was too late, I had like 40 minutes remaining for 3 more questions. the exam was very extremely tricky. all this work with VAT was very time consuming. forgot to include kitchen furniture as a deductible expense.
hope to pass with 50.

blackcode said 8 hours, 39 minutes ago:
paper was quite easy. i attempted 70 marks only n still hoping to pass:).i wasnt good at time management i guess otherwise could have attempted 100 marks. did anyone get 3 gains equal to zero (including PPR relief)? also capital allowance in q.2 was equal to 3600? how do we treat pension income for income tax purpose? we consider it as non saving income or saving? and person getting pension income does he pay any NIC?
I also got gain with PPR relief as zero. I thought the house was occupied all the time. although in the book it said it could only be unoccupied due to work in UK for not more than 4 years to qualify for PPR relief. capital allowance should be like 3,600. pension income was below personal allowance, as he was more than 75, therefore taxable income on it was zero. it is not a saving income. but forgot to calculate tax for first 2,440 of building society interest, which is a saving income, taxed it at 20%. persons above 60-65 (women and men) do not pay NIC on their income (looked it up in the book after exam). I did not calculate NIC on it, said these two types of income were exempt, but did not explain why.

@emira said:
blackcode said 8 hours, 39 minutes ago:
paper was quite easy. i attempted 70 marks only n still hoping to pass:).i wasnt good at time management i guess otherwise could have attempted 100 marks. did anyone get 3 gains equal to zero (including PPR relief)? also capital allowance in q.2 was equal to 3600? how do we treat pension income for income tax purpose? we consider it as non saving income or saving? and person getting pension income does he pay any NIC?
I also got gain with PPR relief as zero. I thought the house was occupied all the time. although in the book it said it could only be unoccupied due to work in UK for not more than 4 years to qualify for PPR relief. capital allowance should be like 3,600. pension income was below personal allowance, as he was more than 75, therefore taxable income on it was zero. it is not a saving income. but forgot to calculate tax for first 2,440 of building society interest, which is a saving income, taxed it at 20%. persons above 60-65 (women and men) do not pay NIC on their income (looked it up in the book after exam). I did not calculate NIC on it, said these two types of income were exempt, but did not explain why.

Regarding PPR I got gain £6000 - when working overseas this should be chargeable (not exempt).
Re Pension I do not think you have to explain why - question asked to calculate NIC (if any) - I put Nil - exempt.
His savings interest should be taxed at 10% for his first £2440. You are correct his pensions were within the personal allowance of 78 years old. This is treated as Other Income (not savings).
Good luck.

thanks Joevassalo. I think working overseas is fully exempt if required by employer, and if he occupies the house both before and after.
the paper did cover the whole syllabus pretty much. not many people remember about 10% tax for savings income below 2,440.
good luck to all of you :)

Did anyone adjust the old chaps personal allowance because his pension income and bank interest was higher than the £22,900?

@champion said:
Did anyone adjust the old chaps personal allowance because his pension income and bank interest was higher than the £22,900?

IT SHOULD NOT BE ADJUSTED - IT WAS WITHIN HIS PAA - IT IS ONLY HIS SAVINGS WHICH ARE TAXABLE INCOME AND YOU NEED TO USE THE 10% of £2440 FIRST.
That is what I did at least. Good luck.

@champion. I adjusted the P.A for total income on the old chap. Thought the £2440 only counted if total was below that, if above-tax at 20% ....... thats what i did anyway.

@cazza99 said:
@champion. I adjusted the P.A for total income on the old chap. Thought the £2440 only counted if total was below that, if above-tax at 20% ....... thats what i did anyway.

Well his "OTHER" income was NIL really after his PAA. Then Savings income....and the first £2440 apply here..... I think.

Hi Joe. You may well be right, i honestly cant be bothered checking out the text book. Cant do much about dropping those marks now can we........... need to revise for F9 on friday!
Lets pray for a pass;)

@cazza99 said:
Hi Joe. You may well be right, i honestly cant be bothered checking out the text book. Cant do much about dropping those marks now can we........... need to revise for F9 on friday!
Lets pray for a pass;)

I agree with you. Too late now and sometimes you learn from these mistakes anyway.Good luck for your F9. I have the F8 tomorrow.

His pension income was about £9k plus his bank interest which was about £18k(gross), that gives net income of £27k which is £4k over the £22,900 limit therefore divide the excess £4k by 2. Then take the £2k off his personal allowance of £9,640 making it £7,640, that's what I did hopefully it's right.

@champion said:
His pension income was about £9k plus his bank interest which was about £18k(gross), that gives net income of £27k which is £4k over the £22,900 limit therefore divide the excess £4k by 2. Then take the £2k off his personal allowance of £9,640 making it £7,640, that's what I did hopefully it's right.

Yes but Non-Savings income (his pension) and Savings Income (interest) are to be kept separate and PA only apply on Non-Savings income.

F8.... ouch. Good luck tomoz. My arm ached like hell after F8.

in q.1 old chap pension income was non saving?if it wasnt non saving what was it and how to tax it..i considered it non saving and tax at 20% and adjusted PAA coz his pension income( which i considered it was non saving) and gross interest income was above 22900.
also the guy whos employed in q1...was it some info saying his EMPLOYER PAYS ON HIS BEHALF...i did not deduct it from his employment income at all. i dont know i did right or wrong, scenario didnt say that pension is DEDUCTED . i just gave reason for not deducting it that whatever employer pays on employee behalf duznt have any effect on income tax computation but it will count towards his Annual pension contribution.

@cazza99 said:
@champion. I adjusted the P.A for total income on the old chap. Thought the £2440 only counted if total was below that, if above-tax at 20% ....... thats what i did anyway.

After adjusting his personal allowance and deducting it his pension was still above the £2440 so we couldn't use the 10% rate.