Relevant for exams up to the June 2016 session
The aim of the exam is to ensure that candidates have an understanding of the tax system, and a knowledge of income tax, national insurance contributions, capital gains tax, inheritance tax, corporation tax and value added tax. The syllabus covers virtually everything dealt with in FTX, the Foundations in Taxation exam as well as some new topics introduced at the Paper F6 level. The exam provides a solid basis for those candidates who wish to progress to P6 (UK), Advanced Taxation.
The exam consists of two sections, with all questions within each section being compulsory.
Section A will be comprised of 15 multiple-choice questions worth two marks each. The questions could be on any area of the syllabus, and will be a mix of computational and narrative.
Section B will be comprised of four 10-mark questions and two 15-mark questions.
The four 10-mark questions could be on any area of the syllabus. Given that Section A is the same, this means that it is very important for students to study the whole of the syllabus.
The two 15-mark questions will focus on income tax (syllabus area B) and corporation tax (syllabus area E).
Questions in Section B will be predominantly computational, although each question may contain written elements, and it is possible that an entirely written answer might be required.
The most important syllabus areas that you can expect to see frequently examined are as follows:
- Income from employment (in particular, the income assessable, the allowable deductions and benefits).
- Income from self-employment (in particular, the basis of assessment, the expenditure that is allowable, assessable profits on commencement and cessation, capital allowances and relief for trading losses).
- Property and investment income (in particular, property business profits, savings income and dividend income).
- The computation of taxable income and the income tax liability.
- The self-assessment system.
- The time limits for the submission of information, claims and payment of tax.
- Computation of a person’s chargeable gains.
- Computation of the amount of allowable expenditure for a part disposal.
- Computation of the chargeable gain when a chattel is disposed of.
- Computation of the exemption when a principal private residence is disposed of.
- The share identification rules as they apply to individuals and to companies.
- The computation of the capital gains tax payable by individuals.
- Exemptions and reliefs (entrepreneurs’ relief, rollover relief and holdover relief for gifts).
Inheritance tax (IHT)
- The seven-year accumulation principle.
- The IHT liabilities arising on lifetime transfers.
- The IHT liability on a death estate.
- The annual exemption and the exemption for gifts between spouses.
- The payment of IHT.
- Taxable total profits (in particular, the expenditure that is allowable in calculating the tax-adjusted trading profit, capital allowances, property business profits, chargeable gains and relief for trading losses).
- Computation of the corporation tax liability.
Value added tax (VAT)
- The circumstances in which a person must register for VAT.
- The computation of VAT liabilities (in particular, the tax point, the valuation of supplies, non-deductible input VAT and relief for impairment losses on trade debts).
- The cash accounting, annual accounting and flat rate schemes.
Finance Act article
Candidates sitting F6 (UK), Taxation should read the relevant Finance Act article which is published each year on the ACCA website as this article is highly relevant to F6 (UK).
Other technical articles are also available on the ACCA website to assist students in preparing for exams.
Written by a member of the F6 (UK) examining team
Updated March 2015