P6 Advanced Taxation

How important is it to know the technical areas covered in Paper F6?

Paper F6 is the foundation for Paper P6. Therefore it is very important for candidates to have a sound knowledge of the areas covered in F6 when they sit the P6 exam.

Although the questions in P6 will look very different from those you've seen in F6, a significant proportion of their technical content may be F6 material.

What else should I be reading in order to prepare for the exam?

There are a number of technical articles on our website covering different areas of the P6 (UK) syllabus. The articles have been written by the examiner and are a good indication of his approach to some of the technical areas within the syllabus.

They include scenarios where tax rules are applied to different situations and advice on how to approach some of the more challenging aspects of the P6 UK syllabus.

The articles are updated every year to reflect the changes introduced by the annual Finance Act; you should ensure that you are reading the version of the article for the year in which you are sitting the exam.

There is also an article on how to approach Section A questions in the P6 (UK) exam - see the Student Accountant March 2011.

How useful are the past exam papers on the ACCA website?

The past exam papers on our website are useful in that they show the structure of the exam and the style of questions that you will encounter.

However, they are a record of what was set in the past and are not updated to reflect the changes introduced by the annual Finance Act; accordingly, they should not be used for question practise.

If you attend a revision course or purchase revision material, you should be provided with past exam questions updated to reflect any changes to the legislation since the paper was originally set.

Is it more important to practise questions or to learn the rules?

It is important that you do both. You will find it very difficult to practise questions if you do not know the rules and, once you are in the exam, you need to be able to apply your knowledge of the tax system quickly and accurately.

However, you must also practise questions as you need to know that you are able to deal with the style of questions in the exam.

In relation to inheritance tax, how much technical knowledge should candidates have compared with the ability to tax plan, particularly in relation to trusts?

Please refer to the pilot paper and past exam papers to get an understanding of the tax planning ability expected of candidates.

In Question 1(b)(i) of the P6 (UK) December 2008 paper, the question described a scenario where an individual could be domiciled or non-domiciled in the UK for inheritance tax purposes but didn't state which was the case, and the published answer addressed both possible alternatives in full. Should candidates have made an assumption and then answered only in accordance with that assumption?

No, because they would then not have been able to obtain any of the marks available for the alternative circumstance.

The position described in the scenario was deliberately left unclear and the wording of the question reflected this.

At the professional level, candidates should have sufficient knowledge to discuss all potential options in advice-type situations.

There have been recent significant changes in legislation related to several topics covered in F6. Are these new or changed topics more likely to be examined in P6 papers than other topics from F6?

Candidates are expected to know the current legislation when attempting the P6 paper and thus to have updated their F6 knowledge for any changes. But the mere fact that legislation has recently changed in a particular area does not make a topic more examinable than any other area of the syllabus.

Which Finance Act will be examinable in papers T9 (UK), F6 (UK) and P6 (UK) in June and December 2011?

Finance Act (No 1) 2010 and Finance Act (No 2) 2010 will be examinable in the June and December 2011 exam sessions. There is an annual cut-off date for examinable legislation of 30 September for these papers, which means that legislation passed before 30 September 2010 will be examinable in June and December 2011.

However, to provide publishers, tuition providers and candidates with certainty and clarity, should there be a Finance Act (No 3) 2010 passed before 30 September 2010, this will NOT be examinable in June and December 2011.

Why do the UK tax pilot papers use tax questions relating to 2006-07?

The question and answer papers published on our website appear as they did when the exams were first set. This is clearly stated at the top of the page where the past papers are found. The pilot paper and past papers are merely indicative of the level of difficulty and style of questions that can come up in an exam.

The papers have not been updated for any changes in legislation or standards nor any amendments to the syllabus. Thus, they must be used with caution when preparing for current examinations. This also applies to the tax variant papers, although these will have been based on the legislation for each country at the time they were written.

Updated versions of questions and answers can be obtained by purchasing an Exam kit or a Practice and Revision kit from one of ACCA's Approved Learning Partners.

With the introduction of inheritance tax (IHT) to the F6 (UK) syllabus, how will the P6 (UK) examination change?

The approach taken will be no different from that of the other taxes examined in P6 (UK). In other words, the topic will be introduced in F6 (UK), and expanded on and examined from different angles in P6 (UK).

At present, the examiner aims to include around 15 IHT marks on each P6 (UK) paper. In the future, IHT will feature in the examination just like all the other taxes examined. There may therefore then be fewer straightforward marks and more emphasis on the areas that are new at the P6 (UK) level.

Partnerships: although the updates to the Income Tax Act provisions relating to partnerships were issued/came into force prior to September 2011 (Act IV of 2011), the updates to the Capital Gains Rules including the rules on value shifting and determining the capital gains on transfers and changes to interests in partnerships were issued on 21 October 2011. Are such topics examinable in P6 MLA?

These rules are NOT examinable in 2012 for P6 MLA, but will be examinable from June 2013.

High Net Worth Individuals ("HNWI"): Article 56(23), Income Tax Act introducing the beneficial tax rate for HNWI was introduced prior to 30 September 2011. The Rules in respect of HNWI applicable to EU/EEA/Swiss individuals were issued on 30 September 2011 and the rules applicable to non-EU/EEA/Swiss individuals were issued on 7 October 2011. Furthermore, the amendments to the Residence Scheme Regulations were issued on 30 September 2011. The syllabus for P6 first includes the HNWI in the scope of income tax then excludes it in the list of excluded topics.

The Rules in respect of HNWI applicable to EU/EEA/Swiss individuals and the amendments to the Residence Scheme Regulations were both issued on 30 September 2011 and are therefore examinable, as shown under A (1) (b) (iii) of the syllabus.

However since the rules applicable to non-EU/EEA/Swiss individuals were issued on 7 October 2011, these are not examinable as stated in the "excluded topics" section of the syllabus under part A (1).

Extract from P6 MLA syllabus: A1 (b) The scope of income tax:
iii) Determine the special rules applicable to permanent residents, returned migrants, highly qualified persons and high net worth individuals.

Excluded topics: The scope of income tax: High Net Worth Individuals - Non-EU/Non-EEA/Non-Swiss Nationals.

Are the Highly Qualified Persons Rules examinable at P6 MLA?

Yes, these rules are examinable for P6 MLA.