Relevant for exams from September 2016
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 the FTX, Foundations in Taxation exam, as well as some new topics introduced at the F6 level. The exam provides a solid basis for those candidates who wish to progress to P6 (UK), Advanced Taxation.
The exam consists of three sections, with all questions within each section being compulsory.
Section A is comprised of 15 objective test questions worth 2 marks each. The questions could be on any area of the syllabus, and will be a mix of computational and narrative.
Because Section A will include objective test questions from the whole of the F6 syllabus, it is very important that candidates ensure they cover the whole syllabus when revising for the F6 exam.
In addition, it is important that candidates do not spend too much time on any one question. It is important to remember that each objective test question is only worth two marks.
Section B is comprised of three questions comprising five objective test items worth two marks each; therefore each question is worth a total of ten marks. Each question will be based around a common scenario "case" which can come from any area of the syllabus, and will be a mix of computational and narrative.
Similar to Section A, some of the objective test items within these questions may take longer to answer than others, so candidates should manage their time across each "case" question rather than trying to allocate time to each individual objective test item.
Section C is comprised of one 10-mark question and two 15-mark questions. The 10-mark question may come from any area 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 C will be predominantly computational, although each question may contain written elements. Unlike Sections A and B, which are auto-marked, the Section C questions will still be manually marked and so it continues to be absolutely vital that all workings are clearly shown.
The most important syllabus areas which you can expect to see frequently examined throughout the exam 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 income, 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 income, chargeable gains and relief for trading losses).
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
A question could involve more than one tax and/or could require candidates to have knowledge of basic tax planning. In a higher skills question of this nature, it is important that you carefully plan out the approach your answer will take.
Question 31 in the specimen is a good example of a higher skills style question.
Finance Act article
Candidates sitting F6, Taxation (UK) 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 2016