ACCA F6 Chapter 6
(142).webp "ACCA F6 Chapter 6 - Quiz")
Quiz of Chapter 6 of ACCA F6 Taxation "Property Income".
Questions and Answers
- 1.
In the income tax computation, property income is classified as _______.
- A.
Savings Income
- B.
Non-savings Income
- C.
Property Income
- D.
Dividend Income
Correct Answer
B. Non-savings IncomeExplanation
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.Rate this question:
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- 2.
Wear & Tear allowance can be claimed in respect of the property which is _________.
- A.
Let Furnished
- B.
Let Unfurnished
- C.
Let for holiday makers
- D.
Let for entire year
Correct Answer
A. Let FurnishedExplanation
Explanation: 10% Wear & Tear allowance can be claimed in respect of the property which is let furnished.Rate this question:
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- 3.
Which of the following is correct in respect of Capital Allowance & Wear and Tear Allowance?
- A.
Only one can be claimed for the accommodation let furnished
- B.
Both can be claimed in respect of property let unfurnished
- C.
Only one can be claimed for the accommodation let unfurnished
- D.
Both can be claimed in respect of property let furnished
Correct Answer
C. Only one can be claimed for the accommodation let unfurnishedExplanation
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 landlordRate this question:
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- 4.
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:
- A.
£6,000
- B.
£5,850
- C.
£5,300
- D.
£4,730
Correct Answer
D. £4,730Explanation
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 4,729.50Rate this question:
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- 5.
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:
- A.
£5,959
- B.
£6,850
- C.
£7,000
- D.
£7,020
Correct Answer
A. £5,959Explanation
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 5,958.56Rate this question:
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- 6.
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:
- A.
£4,200
- B.
£6,642
- C.
£7,200
- D.
£7,980
Correct Answer
B. £6,642Explanation
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 6,642Rate this question:
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- 7.
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:
- A.
£11,800
- B.
£9,000
- C.
£8,448
- D.
£6,912
Correct Answer
C. £8,448Explanation
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 8,448Rate this question:
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- 8.
In relation to Furnished Holiday lettings, furniture can attract:
- A.
Only Wear & Tear allowance
- B.
Only Capital Allowance
- C.
Both allowances
- D.
None of the above
Correct Answer
B. Only Capital AllowanceExplanation
Explanation: Only capital allowances can be claimed in respect of Furniture in Furnished Holiday Lettings.Rate this question:
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- 9.
Income from Furnished Holiday Lettings:
- A.
Qualifies as relevant earnings for the purpose of pension relief
- B.
Does not qualify as relevant earnings for the purpose of pension relief
- C.
Can either qualify subject to the taxpayer opting for that
Correct Answer
A. Qualifies as relevant earnings for the purpose of pension reliefExplanation
Explanation: Income from Furnished Holiday Lettings qualifies as relevant earnings for the purpose of pension relief.Rate this question:
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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.
- A.
75
- B.
110
- C.
130
- D.
140
Correct Answer
D. 140Explanation
Explanation: Accommodation must be available for letting for a minimum of 140 days during the year.Rate this question:
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- 11.
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.
- A.
70
- B.
95
- C.
107
- D.
111
Correct Answer
A. 70Explanation
Explanation: Accommodation must be let to members of public for at least 70 days during the tax year.Rate this question:
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- 12.
Exempt amount for Rent A Room Relief is £_______ (gross rent before expenses and capital allowances).
- A.
1,250
- B.
2,250
- C.
3,250
- D.
4,250
Correct Answer
D. 4,250Explanation
Explanation: The exempt amount is £4,250.Rate this question:
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- 13.
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:
- A.
£400
- B.
£7,600
- C.
12,400
- D.
£20,000
Correct Answer
C. 12,400Explanation
Explanation: 20,000 – [2% X (20-1) X 20,000] = 12,400.Rate this question:
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- 14.
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:
- A.
£400
- B.
£8,125
- C.
£7,600
- D.
£20,000
Correct Answer
C. £7,600Explanation
Explanation: 40,000 – [2% X (20-1) X 40,000] = 32,400.Rate this question:
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- 15.
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:
- A.
£3,300
- B.
£7,500
- C.
£10,800
- D.
£12,000
Correct Answer
B. £7,500Explanation
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 7,500Rate this question:
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Jan 24, 2024Quiz Edited by
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Feb 29, 2012Quiz Created by
LFTC2011
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