ACCA - Association Of Chartered Certified Accountants
ACCA - Association Of Chartered Certified Accountants
ACCA - Association of Chartered Certified Accountants
Class notes
UPDATED NOTES F6 UK TAX ACCA FOR EXAM SERIES APRIL 2022- APRIL 2023
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ACCA - Association of Chartered Certified Accountants
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ACCA - Association Of Chartered Certified Accountants
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F6 Taxation (FA17) - Complete Text
Complete lecture notes all for UK TAX IFRS ACCA. Updated for MARCH 2023 EXAM. F6 notes ACCA before APRIL. All topics concisely explained in one document. Highly detailed notes.
ACCA - Association of Chartered Certified Accountants
ACCA - Association of Chartered Certified Accountants
ACCA - Association of Chartered Certified Accountants
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Inheritance Tax
Sunday, July 3, 2022 10:51 PM
Only IHT has carry for ward yearly exemption, by one year.
Nil rate band - $325000
If trustee pays, then 20%.
If donor pays then 25%. Calculate gross chargeable transfer.
PET - individual to individual. Nil tax to be paid after 7 years.
CLT - individual to trusts/ default category if neither exempt, nor a PET.
MUST BE PAID 6 MONTHS FROM THE END OF THE MONTH OF DEATH.
For CLT, charge after and before death. Probate value = MV at death/ allowable cost for
donee's at death.
Residence nil rate band -lower of 175000 or value of residential property ( net of
repayment mortgages).
RNRB not available when calculating death charge.
Residence can be any main property.
NRB and RNRB both can be transferred to surviving spouse.
Death NRB- Transfers 7 years prior are ignored, and additional nil rate can be gained.
Tapper Relief
- 0-3 years; 0%
- 3-4 years; 20%
- 4-5 years; 40%
- 5-6 years; 60%
- 6-7 years; 80%
- More than 7 years; 100%
Exemptions
- $3000 annual exemption. Can be carried forward to one tax year.
- Normal expenditure out of income; expense out of income (not asset out of estate),
and no impact on standard of living from transfer.
- Marriage exemption IF marriage takes place.
Parent $5000
Grandparent $2500
Anyone else $1000
Fiance to fiance $2500
- Small gift exemption: Transfer of up to $250 per person per year (de-minimis rule)
Allowable deductions IHT calculation;
CGT, NIC, income tax outstanding and funeral expenses and exempt legacies
(spouse transfers).
Endowment mortgages are not deductible from the property value as these are
automatically repaid on the owner's death. Repayment and interest only mortgages
are deductible. When the deceased has a life insurance policy on his or her own life,
the proceeds of that policy are included in the death estate, rather than the market
F6 TX Page 1
,the proceeds of that policy are included in the death estate, rather than the market
value of the policy at the date of death. Funds held in a pension scheme are outside
of the estate for IHT purposes.
Performa
IHT due
Less reliefs
Less tax paid
Tax liability
F6 TX Page 2
,F6 TX Page 3
, Capital Gains Tax
Thursday, July 7, 2022 2:36 AM
CGT is charged when there is a chargeable disposal of a chargeable asset by a chargeable person.
Transfer of asset upon death is an exempt disposal. Value based on value at time of death.
UK resident classification; in UK 183 days or more, only home UK, full time work in UK.
Capital Losses are subtracted from gains before annual exemption. But losses carried forward are
subtracted after exemption.
TAXABLE INCOME 37500 band - 10% or 18% if residential property.
More than 37500 - 20% or 28%.
Annual exemption; 12300.
Losses and exemptions deducted from property gains to save tax.
However, how any unused basic rate tax band is allocated between chargeable gains does not make
any difference to the overall CGT liability (since the differential is 10% in both cases).
CGT disposal of property payable within 30 days (payment on account).
If self-assessed then, by 31 January.
Taxable income - 12500 personal allowance deduct from Gross Income, and pension contributions
extend basic rate band.
Performa for single asset G/L
Proceeds $
Incidental cost of disposal ($)
Net proceeds $
Less allowable cost
Original cost (purchase cost + incidental cost of purchases) ($)
Enhancement expense ($)
Gain/Loss $/($)
Losses carried forward indefinitely until death. Upon death, losses can be carried back up to 3 years.
Married couple/ civil - TAX EXEMPT TRANSFERS
EXEMPT DISPOSALS; motor vehicles, Qualifying Corporate Bonds, National Saving Certificates,
Investments in Individual Savings Account, Certain Chattels (caravan, trailer homes, boats), Principal
Private Residence, Government Gilts/Securities, and Current Assets.
Exceptional Disposals
- Transfer sale with connected persons, including company in which individual has control.
Proceeds replaced with transfer value
F6 TX Page 4
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