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ACCA F6 Taxation UK Summary

The document provides a comprehensive summary of UK taxation as covered in ACCA F6, detailing key areas such as income tax for individuals, capital allowances, capital gains tax, corporation tax, inheritance tax, VAT, administration and HMRC processes, and ethics in tax advice. It outlines specific rates, exemptions, and reliefs applicable to each tax category, as well as the responsibilities of tax professionals. The summary serves as a concise reference for understanding the various aspects of UK taxation for the relevant tax year.

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131 views3 pages

ACCA F6 Taxation UK Summary

The document provides a comprehensive summary of UK taxation as covered in ACCA F6, detailing key areas such as income tax for individuals, capital allowances, capital gains tax, corporation tax, inheritance tax, VAT, administration and HMRC processes, and ethics in tax advice. It outlines specific rates, exemptions, and reliefs applicable to each tax category, as well as the responsibilities of tax professionals. The summary serves as a concise reference for understanding the various aspects of UK taxation for the relevant tax year.

Uploaded by

lamegang119
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ACCA F6 (UK Taxation) - Chapter-wise Summary

1. Income Tax - Individuals

- Employment income: salaries, bonuses, BIKs (company cars, accommodation).

- Trading income: adjusted profits, capital allowances, basis periods (opening/closing year rules).

- Property income: net rents, allowable expenses.

- Savings & investment income: bank interest, dividends.

- Personal allowance: £12,570 (22/23), reduced £1 for every £2 income above £100,000.

- Tax bands: 20%, 40%, 45% (basic, higher, additional rates).

- NIC: Class 1 (employed), Class 2 & 4 (self-employed).

2. Capital Allowances

- Plant & machinery: AIA (£1,000,000 max), WDA (18% main pool, 6% special rate pool).

- First Year Allowances: 100% on qualifying items.

- Private use adjustment for sole traders.

- Short-life assets and cars (CO2 emissions based).

3. Capital Gains Tax (CGT)

- Chargeable assets: land, buildings, shares, personal possessions.

- Exemptions: private residence relief, chattels exemption.

- Reliefs: Gift relief, Rollover relief, Entrepreneurs' relief (Business Asset Disposal Relief).

- Annual exempt amount: £12,300 (22/23).

- CGT Rates: 10%/20% (basic/higher rate), 18%/28% for residential property.

- Computation format:

Proceeds

(Cost)

= Gain

+ Indexation (companies only)

- Reliefs/exemption
ACCA F6 (UK Taxation) - Chapter-wise Summary

= Taxable gain

4. Corporation Tax

- Tax rate: 19% or marginal relief for profits between £50k-£250k.

- Adjusted trading profits (add back disallowables, deduct capital allowances).

- Capital allowances: same as individuals.

- Chargeable gains: indexation allowance up to Dec 2017.

- Losses: current year, carry back, carry forward.

- Group relief: 75% group, loss transfer between group members.

5. Inheritance Tax (IHT)

- Lifetime transfers: PETs, CLTs (7-year rule applies).

- Death estate: includes all assets, deduct liabilities.

- Exemptions: Spouse, Charity, £3,000 annual, small gifts £250.

- Nil rate band: £325,000, Residence nil rate band £175,000.

- Rates: Lifetime 20%, Death 40% (reduced to 36% if 10%+ to charity).

- Taper relief if PET survives 3-7 years (40% to 8%).

- Reliefs: BPR, APR (50% or 100%).

- Due: 6 months after month of death or lifetime transfer.

6. VAT

- VAT registration: compulsory over £85,000 taxable turnover.

- VAT Returns: quarterly, submitted electronically.

- Output tax: charged on taxable supplies.

- Input tax: recoverable if related to taxable business.

- Schemes: Flat Rate, Cash Accounting, Annual Accounting.

- Place of supply rules: services vs goods, B2B/B2C.


ACCA F6 (UK Taxation) - Chapter-wise Summary

- Partial exemption rules.

- VAT due = Output VAT - Input VAT.

7. Administration & HMRC

- Self-assessment: key dates (31 Jan filing/payment), 31 July POA.

- Interest and penalties: late filing/late payment.

- HMRC powers: discovery assessment, enquiry window.

- Appeals and dispute resolution.

- Record retention: 5 years for individuals, 6 years for companies.

- Double taxation relief: available where income taxed overseas.

8. Ethics & Tax Advice

- Fundamental principles: Integrity, Objectivity, Professional competence, Confidentiality, Professional

behavior.

- Tax avoidance vs tax evasion.

- Responsibilities when giving tax advice: transparency, documentation, ethical boundaries.

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