Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.
Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚
Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚
Best Of
Re: Capital gains tax on a second home after inheriting another
The property has been used as a PPR so no.
Pian32
5
Re: Capital gains tax on a second home after inheriting another
So she will be liable for capital gains. However that would be subject to PPR relief.
That's worked out by using the amount of time you have had the property as your primary residence compared to it not.
There are also some exemptions for different time periods most of which require you to return to the property and live there as a primary residence
The last of these doesn't require that and that is the last 18 months of ownership is always considered as living in for PPR.
Basically it will depend on how long it takes to sell. If quick then it's likely all/most of the Capital gains will be exempt.
That's worked out by using the amount of time you have had the property as your primary residence compared to it not.
There are also some exemptions for different time periods most of which require you to return to the property and live there as a primary residence
The last of these doesn't require that and that is the last 18 months of ownership is always considered as living in for PPR.
Basically it will depend on how long it takes to sell. If quick then it's likely all/most of the Capital gains will be exempt.
Pian32
5
Re: Foreign Pension Income
Kay,
It sounds like you're talking about the remittance basis.
This only applies if the client has unremitted foreign income and gains of less than £2,000 in a single tax year. If this is the case, and your client doesn't remit the Canadian overseas pension to the UK (and there is no other unremitted foreign income or gains which would mean the £2,000 limit is exceeded, then the Canadian pension wouldn't be taxable in the UK.
If this £2,000 figure is likely to be breached then you may find HMRC's internal manual and the relevant section on Canadian pension income and double taxation of interest. It's available here:
https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4610#:~:text=Article 17 of the agreement,only in the United Kingdom.
Hope that's helpful in clarifying matters.
Phil
It sounds like you're talking about the remittance basis.
This only applies if the client has unremitted foreign income and gains of less than £2,000 in a single tax year. If this is the case, and your client doesn't remit the Canadian overseas pension to the UK (and there is no other unremitted foreign income or gains which would mean the £2,000 limit is exceeded, then the Canadian pension wouldn't be taxable in the UK.
If this £2,000 figure is likely to be breached then you may find HMRC's internal manual and the relevant section on Canadian pension income and double taxation of interest. It's available here:
https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4610#:~:text=Article 17 of the agreement,only in the United Kingdom.
Hope that's helpful in clarifying matters.
Phil
Re: Joining AAT from ACCA
Hi,
You can apply for exemptions from three units of our Professional Diploma in Accounting.
Alternatively, anyone who has completed the ACCA Diploma in Accounting and Business (Papers F1, F2, F3 and two papers from F6, F8, and F9) within the last three years, is eligible to apply for full AAT membership.
You will need to email a scanned copy of your certificate to [email protected] to gain an exemption.
Our Customer Support team will confirm the eligibility of your exemption, provide details as to how you can register and pay any exemption fee.
Hope that's of some help.
Phil
You can apply for exemptions from three units of our Professional Diploma in Accounting.
Alternatively, anyone who has completed the ACCA Diploma in Accounting and Business (Papers F1, F2, F3 and two papers from F6, F8, and F9) within the last three years, is eligible to apply for full AAT membership.
You will need to email a scanned copy of your certificate to [email protected] to gain an exemption.
Our Customer Support team will confirm the eligibility of your exemption, provide details as to how you can register and pay any exemption fee.
Hope that's of some help.
Phil
Re: How long does AVBK take?
AVBK is one of the bigger modules. If you've done the Management module it'll be about the same as that if not I'd say about 1.5* longer than the smaller modules as an estimate.
I can't really give a time as everyone studies at different paces (even over an hour) and would want different amounts of revision work. I was generally fine by reading the osborne book and then doing practice papers but I know some people would want to do lots of questions as they went along.
I can't really give a time as everyone studies at different paces (even over an hour) and would want different amounts of revision work. I was generally fine by reading the osborne book and then doing practice papers but I know some people would want to do lots of questions as they went along.
Pian32
1
Re: Suspense Account question
I see two parts to your post, so I will try and deal with them separately
The suspense question is not that bad. Remember, the goal we are aiming for is to get rid of our Suspense account balance, by getting both sides of our ledger to equal the same amount.
However, in this question, the journals have already been prepared for you, so all you have to do is enter them into the ledger accounts.
If you've passed Bookkeeping Transactions, you should know that we enter the name of the corresponding account, when doing ledger entries for Double Entry. So in the Office Furniture ledger, you would enter Suspense in the details box when accounting for the journal entries, and in the suspense account you would enter Office Furniture in the details box.
If you've done the entries right, the debit and credit totals in the suspense account should be the same, effectively cancelling out the suspense account balance.
I'm sure loads will have good advice on here about exam nerves, but the key other than good preparation, is just being kind to yourself (i.e good night sleep, healthy meal and either a pre or post exam treat whatever the outcome.) Also, don't put any additional pressure on yourself, AAT exams are tough enough as it is.
Good Luck.
The suspense question is not that bad. Remember, the goal we are aiming for is to get rid of our Suspense account balance, by getting both sides of our ledger to equal the same amount.
However, in this question, the journals have already been prepared for you, so all you have to do is enter them into the ledger accounts.
If you've passed Bookkeeping Transactions, you should know that we enter the name of the corresponding account, when doing ledger entries for Double Entry. So in the Office Furniture ledger, you would enter Suspense in the details box when accounting for the journal entries, and in the suspense account you would enter Office Furniture in the details box.
If you've done the entries right, the debit and credit totals in the suspense account should be the same, effectively cancelling out the suspense account balance.
I'm sure loads will have good advice on here about exam nerves, but the key other than good preparation, is just being kind to yourself (i.e good night sleep, healthy meal and either a pre or post exam treat whatever the outcome.) Also, don't put any additional pressure on yourself, AAT exams are tough enough as it is.
Good Luck.
5
Re: AIA
Hi, first of all as you work in accounts you should be aware that depreciation has no impact what so ever on Capital Allowances and the tax calculations, depreciation is purely for bookkeeping purposes.
I take it that the £10,852 for the first van is the only the Capital element of the finance agreement as it is only this that you can claim AIA on, with the monthly interest charge being claimed as an expense through the P&L.
What happens now is that £3,650 that was received for the old van is the disposal proceeds and then you can claim AIA for the cost of the new van (only the Capital element), so if £14,650 is the Capital cost of the van which you can claim AIA on minus the disposal proceeds will give you the amount you can claim, nothing else is needed
I have based the above on the finance arrangement being a HP agreement
I take it that the £10,852 for the first van is the only the Capital element of the finance agreement as it is only this that you can claim AIA on, with the monthly interest charge being claimed as an expense through the P&L.
What happens now is that £3,650 that was received for the old van is the disposal proceeds and then you can claim AIA for the cost of the new van (only the Capital element), so if £14,650 is the Capital cost of the van which you can claim AIA on minus the disposal proceeds will give you the amount you can claim, nothing else is needed
I have based the above on the finance arrangement being a HP agreement
Re: Calculating payback
For payback, scrap value can be available or recovered as cash when you will scrap it, may be after 5 years, not at the time of investment. Hence, don't take away from initial investment to calculate payback period. Question is: How much time it will take to recover your initial cash outflow which is £450,000 for A and £100,000 for B, not £430,000 for A and £90,000 for B. I hope this clarifies.
Re: Management Costing
The payback period is the length of time it takes for the initial cash outlay for the investment to be recovered in cash (Note that the cash inflow is not the same as the income since depreciation is not subtracted in the determination of net cash flow).
If the cash flow is the same each year, then it equals the initial investment divided by the annual net cash inflow. If the cash inflow in uneven, start with the initial investment and then subtract each year's inflow until the entire investment has been recovered. Consider the scrap value to be the cash inflow in the last year (on selling the investment).
If the cash flow is the same each year, then it equals the initial investment divided by the annual net cash inflow. If the cash inflow in uneven, start with the initial investment and then subtract each year's inflow until the entire investment has been recovered. Consider the scrap value to be the cash inflow in the last year (on selling the investment).
April 2020 Public Affairs & Policy round-up
The AAT monthly public affairs and policy round-up of our lobbying activity etc. is available now here:
https://www.aat.org.uk/aat-news/aat-public-affairs-and-public-policy-activities-april-2020
https://www.aat.org.uk/aat-news/aat-public-affairs-and-public-policy-activities-april-2020