ACCA F6 Chapter 6

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  • 1/15 Questions

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

    • Let Furnished
    • Let Unfurnished
    • Let for holiday makers
    • Let for entire year
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About This Quiz


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

ACCA F6 Chapter 6 - Quiz

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  • 2. 

    Income from Furnished Holiday Lettings:

    • Qualifies as relevant earnings for the purpose of pension relief

    • Does not qualify as relevant earnings for the purpose of pension relief

    • Can either qualify subject to the taxpayer opting for that

    Correct Answer
    A. Qualifies as relevant earnings for the purpose of pension relief
    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 _______.

    • Savings Income

    • Non-savings Income

    • Property Income

    • Dividend Income

    Correct Answer
    A. Non-savings Income
    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).

    • 1,250

    • 2,250

    • 3,250

    • 4,250

    Correct Answer
    A. 4,250
    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:

    • £400

    • £7,600

    • 12,400

    • £20,000

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

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  • 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.

    • 70

    • 95

    • 107

    • 111

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

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  • 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:

    • £4,200

    • £6,642

    • £7,200

    • £7,980

    Correct Answer
    A. £6,642
    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

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  • 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:

    • £5,959

    • £6,850

    • £7,000

    • £7,020

    Correct Answer
    A. £5,959
    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

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  • 9. 

    In relation to Furnished Holiday lettings, furniture can attract:

    • Only Wear & Tear allowance

    • Only Capital Allowance

    • Both allowances

    • None of the above

    Correct Answer
    A. Only Capital Allowance
    Explanation
    Explanation: Only capital allowances can be claimed in respect of Furniture in Furnished Holiday Lettings.

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  • 10. 

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

    • 75

    • 110

    • 130

    • 140

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

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  • 11. 

    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:

    • £400

    • £8,125

    • £7,600

    • £20,000

    Correct Answer
    A. £7,600
    Explanation
    Explanation: 40,000 – [2% X (20-1) X 40,000] = 32,400.

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  • 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: 

    • £11,800

    • £9,000

    • £8,448

    • £6,912

    Correct Answer
    A. £8,448
    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

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  • 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:

    • £3,300

    • £7,500

    • £10,800

    • £12,000

    Correct Answer
    A. £7,500
    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

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  • 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:

    • £6,000

    • £5,850

    • £5,300

    • £4,730

    Correct Answer
    A. £4,730
    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

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  • 15. 

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

    • Only one can be claimed for the accommodation let furnished

    • Both can be claimed in respect of property let unfurnished

    • Only one can be claimed for the accommodation let unfurnished

    • Both can be claimed in respect of property let furnished

    Correct Answer
    A. Only one can be claimed for the accommodation let unfurnished
    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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  • Jan 24, 2024
    Quiz Edited by
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  • Feb 29, 2012
    Quiz Created by
    LFTC2011
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