ACCA F6 Chapter 6

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1. Wear & Tear allowance can be claimed in respect of the property which is _________.

Explanation

Explanation: 10% Wear & Tear allowance can be claimed in respect of the property which is let furnished.

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About This Quiz
ACCA F6 Chapter 6 - Quiz

Quiz of Chapter 6 of ACCA F6 Taxation "Property Income".

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2. Income from Furnished Holiday Lettings:

Explanation

Explanation: Income from Furnished Holiday Lettings qualifies as relevant earnings for the purpose of pension relief.

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3. In the income tax computation, property income is classified as _______.

Explanation

Explanation: Income tax computation is classified in three categories which are non-savings income, savings income and dividends. Non-savings income has major categories of Income from Employment, Income from Self Employment and Income from Property.

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4. Exempt amount for Rent A Room Relief is £_______ (gross rent before expenses and capital allowances).

Explanation

Explanation: The exempt amount is £4,250.

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5. Alpha rents a property on Lease for 20 years receiving a premium of £20,000. In respect of the premium, his taxable property income will be:

Explanation

Explanation: 20,000 – [2% X (20-1) X 20,000] = 12,400.

Submit
6. In order to qualify for Furnished Holiday lettings, the accommodation must actually be let to members of the public for at least _____ days during the tax year.

Explanation

Explanation: Accommodation must be let to members of public for at least 70 days during the tax year.

Submit
7. Alpha rents out 3 furnished properties during tax year 2011/12. He received rent at £500 per month from property A in advance for July 2011-June2012. Rent per month for the previous year was 10% less. For property B, rent is paid monthly in advance. The rent is £600 per month. Rent was 10% less till 30 June 2011. Property C earns the rent quarterly in advance of £700 per month. Quarters start in January, April, July & September. The rent was 10% less up to 30 September 2011. Water rates of £250 and council tax of £450 are paid on 1/2/2012 in respect of property A which cover calendar year of 2012. 20% less amount was paid for both, last year, on 1/2/2011. In respect of property B, Water Rates and Council Tax of £300 and £150 were paid for calendar year 2012 on 1/3/2012. The same were paid 15% less for calendar years 2011 on 1/3/2011. In respect of property C, Water Rates and Council Tax of £400 and £200 respectively on 1/1/2012 for the calendar year 2012. The same amount was paid for calendar year 2011 on 1/1/2011. The rental income from property C for the tax year 2011/12 is:

Explanation

Explanation:
Rent 700 X 6 + 630 X 6 = 7,980
Less: Water Rates & Council Tax (600)
Less: Wear & Tear Allowance (7,980 – 600) X 10% = (738)
Income from Property C 6,642

Submit
8. Alpha rents out 3 furnished properties during tax year 2011/12. He received rent at £500 per month from property A in advance for July 2011-June2012. Rent per month for the previous year was 10% less. For property B, rent is paid monthly in advance. The rent is £600 per month. Rent was 10% less till 30 June 2011. Property C earns the rent quarterly in advance of £700 per month. Quarters start in January, April, July & September. The rent was 10% less up to 30 September 2011. Water rates of £250 and council tax of £450 are paid on 1/2/2012 in respect of property A which cover calendar year of 2012. 20% less amount was paid for both, last year, on 1/2/2011. In respect of property B, Water Rates and Council Tax of £300 and £150 were paid for calendar year 2012 on 1/3/2012. The same were paid 15% less for calendar years 2011 on 1/3/2011. In respect of property C, Water Rates and Council Tax of £400 and £200 respectively on 1/1/2012 for the calendar year 2012. The same amount was paid for calendar year 2011 on 1/1/2011. The rental income from property B for the tax year 2011/12 is:

Explanation

Explanation:
Rent 540 X 3 + 6000 X 9 = 7,020
Less: Water Rates & Council Tax 450 X 3/12 + 382.5 X 9/12 = (399.37)
Less: Wear & Tear Allowance (7,020 – 399.37) X 10% = (662.06)
Income from Property B 5,958.56

Submit
9. In relation to Furnished Holiday lettings, furniture can attract:

Explanation

Explanation: Only capital allowances can be claimed in respect of Furniture in Furnished Holiday Lettings.

Submit
10. Alpha rents a property on Lease for 20 years receiving a premium of £40,000. In respect of the premium, his taxable property income will be:

Explanation

Explanation: 40,000 – [2% X (20-1) X 40,000] = 32,400.

Submit
11. In order to qualify for Furnished Holiday lettings, the accommodation is available for letting for at least _____ days during the tax year.

Explanation

Explanation: Accommodation must be available for letting for a minimum of 140 days during the year.

Submit
12. Romeo lets out the property furnished on 1 July 2011. He received quarterly rent of £3,000 for each quarter staring January, April, July and September in arrears. Council Tax of £900 and Water charges of £420 were paid by him on 1 October 2011 for the tax year 2011/12. Previous tenant left on 30 June 2011 and did not pay the rent for the last quarter which was £2,800. The taxable rental income is: 

Explanation

Explanation:
Rental for the tax year (3000 X 3 +2800) 11,800
Less: Impairment (Not recovered) (2,800)
Less: Water Charges (420)
Less: Council Tax (900)
Less: Wear & Tear Allowance [(11,800-2,800-420-900) X 10% (768)
Net rental Income 8,448

Submit
13. Alpha granted lease to beta on 1.1.2001 for 45 years and received premium of £35,000. Beta granted sub-lease of the same property to Theta on 1.1.2012 for 15 years and received premium of £15,000. In respect of the premium received by Beta, his deemed income will be:

Explanation

Explanation:

Premium on Sub-lease 15,000 – [2% X 15,000 X (15-1)] 10,800
Less: Allowance for premium paid 35,000 – [35,000 X 2% X (40-1)] X 15/35 (3,300) Taxable Premium 7,500

Submit
14. Alpha rents out 3 furnished properties during tax year 2011/12. He received rent at £500 per month from property A in advance for July 2011-June2012. Rent per month for the previous year was 10% less. For property B, rent is paid monthly in advance. The rent is £600 per month. Rent was 10% less till 30 June 2011. Property C earns the rent quarterly in advance of £700 per month. Quarters start in January, April, July & September. The rent was 10% less up to 30 September 2011. Water rates of £250 and council tax of £450 are paid on 1/2/2012 in respect of property A which cover calendar year of 2012. 20% less amount was paid for both, last year, on 1/2/2011. In respect of property B, Water Rates and Council Tax of £300 and £150 were paid for calendar year 2012 on 1/3/2012. The same were paid 15% less for calendar years 2011 on 1/3/2011. In respect of property C, Water Rates and Council Tax of £400 and £200 respectively on 1/1/2012 for the calendar year 2012. The same amount was paid for calendar year 2011 on 1/1/2011. The rental income from property A for the tax year 2011/12 is:

Explanation

Explanation:
Rent 450 X 3 + 500 X 9 = 5,850
Less: Water Rates & Council Tax 700 X 3/12 + 560 X 9/12 = (595)
Less: Wear & Tear Allowance (5,850 – 595) X 10% = (525.5)
Income from Property A 4,729.50

Submit
15.   Which of the following is correct in respect of Capital Allowance & Wear and Tear Allowance?

Explanation

Explanation: Capital allowances are generally not available on the plant & machinery in a dwelling (residential buildings), however, can be claimed if let furnished. To avoid details of capital allowances, 10% wear and tear allowance is available. These exclude Council tax and Water rates paid by the landlord

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Wear & Tear allowance can be claimed in respect of the property...
Income from Furnished Holiday Lettings:
In the income tax computation, property income is classified as...
Exempt amount for Rent A Room Relief is £_______ (gross rent...
Alpha rents a property on Lease for 20 years receiving a premium of...
In order to qualify for Furnished Holiday lettings, the accommodation...
Alpha rents out 3 furnished properties during tax year 2011/12. He...
Alpha rents out 3 furnished properties during tax year 2011/12. He...
In relation to Furnished Holiday lettings, furniture can attract:
Alpha rents a property on Lease for 20 years receiving a premium of...
In order to qualify for Furnished Holiday lettings, the accommodation...
Romeo lets out the property furnished on 1 July 2011. He received...
Alpha granted lease to beta on 1.1.2001 for 45 years and received...
Alpha rents out 3 furnished properties during tax year 2011/12. He...
 ...
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