Ptc Answers??

MattC

Hey all !

Does any have or plan to put together a set of PTC answers.
I for one feel that there was a fair amount of ambiguity in the June 08 paper

The 6.25% HMRC loan percentage being different to the Osbourne 5% was also an absolulte joke!

Also PPR exempt of not, I`m hearing different opions constantly.

If its was exempt, then no indexation in the whole paper? Surely not?

I always though the text book to this papare was absolutely specific to the exam!!

MattC

MattC wrote: »

Hey all !

Does any have or plan to put together a set of PTC answers.
I for one feel that there was a fair amount of ambiguity in the June 08 paper

The 6.25% HMRC loan percentage being different to the Osbourne 5% was also an absolulte joke!

Also PPR exempt of not, I`m hearing different opions constantly.

If its was exempt, then no indexation in the whole paper? Surely not?

I always though the text book to this papare was absolutely specific to the exam!!

Not a peep from anyone?

Bluewednesday

MattC wrote: »

Hey all !

Does any have or plan to put together a set of PTC answers.
I for one feel that there was a fair amount of ambiguity in the June 08 paper

The 6.25% HMRC loand percentage being different to the Osbourne 5% was also an absolulte joke!

Also PPR exempt of not, I`m hearing different opions constantly.

If its was exempt, then no indexation in the whole paper? Surely not?

I always though the text book to this papare was absolutely specific to the exam!!

I can't see how the HMRC percentage is a joke, you have to use the rates set in the exam paper.

I did the first ever business tax exam in June 2004 and PPR came up in that, of all my class mates none one of us had the same answers as anyone else, you get marks just by going through the process (we all passed).

I'm not sure what you mean by your last statement but if you are prepared for the exam it really doesn't matter what the questions are - as long as they are all inside the syllabus.

Please don't worry about the PPR, if you've used the wrong percentage (as per your Osborne book) but the method was correct you will be fine.

In any case there is nothing you can do about it now so don't even think about it anymore!

Good luck in August

MattC

Hi Blue

I feel that the percentage was a joke because ,with all other units of the AAT ,you would expect to have to check any figures,formulae,ratios etc etc that are displayed in the front of the paper.
This is due to the fact that accounting rules and regulations do change and I appreciate that.

This UK specific tax paper is supposed to stick to the absolute rigid UK tax rules for the tax year 2007/2008.

Osboune should have used the correct figure in the text book, i find it nothing short of disgusting that they didnt

If you look at CIMA for example they do not examine UK tax as it is a global qualification and you would always ensure you check any figurres at the start of the paper for that reason

I say again, that the PTC paper is specific to 2007/08 years tax rules, how can the text book get it wrong??

speegs

I used the % in the paper luckily, but I did notice some time ago that Osborne had not updated their books and I reported this to them. Not that it is any use to us now, but I thought you would like to know.

The more of us who highlight this error the more likely they are to update their material.

Speegs

hunter

I agree MattC, either Osbourne needs to use up to date relevant material, or the AAT need to do something about telling students that learning from that specific text should be supplemented by other information. The % rate and lack of info on redundancy is just not good enough as far as I am concerned.

Frank Wood

MattC wrote: »

Hey all !

Does any have or plan to put together a set of PTC answers.
I for one feel that there was a fair amount of ambiguity in the June 08 paper

The 6.25% HMRC loan percentage being different to the Osbourne 5% was also an absolulte joke!

Also PPR exempt of not, I`m hearing different opions constantly.

If its was exempt, then no indexation in the whole paper? Surely not?

I always though the text book to this papare was absolutely specific to the exam!!

Hi Matt

Didn't the PPR only apply to the first 60 months of occupation plus the last 36 months (deemed to be occupied)? Giving a PPR %age of 96/137 (since the other 41 months were unoccupied). The £70k cost of the house had indexation of £5,810 which both had to be deducted from the proceeds, giving £129,190. PPR of £90528 should be deducted before taper relief @ 60% (10 yrs). Giving a taxable gain of £38,663.

MattC

Hi Frank

I did the same as you, but my tuutor insists that is was completely exempt as it is the only owned residence,and consequently always the PPR?

I hop this isn`t the case, but as I mentioned earlier, there seems to be no consistency with what people are saying!

I`m hoping the answers are released soon

Frank Wood

Hi Matt

Doesn't that only apply if they live there? Presumably when they leave the property they lose the PRR as it is not their primary residence, since they lived elsewhere. I'll ask my tutor who is a tax expert.

speegs

Hi Guys

Even if a residence is you only PPR I was taught that it was entirely exempt if you lived there all the time. If there were periods when you did not live in your PPR these were chargeable to CGT if they did not fall into any of these categories:

1) Last 36 months of ownership.

Also provided they were preceeded and followed by periods of actual occupation the following also applied:

2) 4 years away in the UK or abroad if self employed and working away from home.

3) Any amount of time if sent abroad by your employer to work.

4) 4 years if sent to work away from home in the UK by your employer.

5) 3 years for any other reason.

Therefore, your answer would have had an exemption of 96/137.

Speegs

Frank Wood

Hi Speegs

I agree with you, I went through my books from BPP last night and I think it's 96/137.

Matt

Where do you study? I think your tutor needs to be shot!!

aer87

i agree

I actually did what you guys are saying, and caculated PPR to the above answers! But our tutor also said its exempt? Which i also DO NOT AGREE with!?

Too many if's and but's with this paper!!!! I hope everyone has done the same, then we'll all get the mark!

bryan100

I think the gain would be taxable, along the lines that most people have said. If the property had been let in the period of absence then the letting exemption would have applied and so, in the absence of letting, the whole gain would be taxable.

Emma1708

My tutor also insisted it is entirely exempt

Dee

I have been looking at various web sites including HMRC and they are all saying pretty much the same thing. Principal Private Residence Relief is available on your principal residence i.e. your home. As she moved in with her parents, that became her principal residence for that time. So I take it that she could only claim relief on the house she sold for the period of time she actually lived in it plus the 3 years exemption.

DAVID LAWES

Ppr

Although I didn't sit the 2007/08 exam (I sat personal tax in June 2007, passed it and became fully qualified MAAT in September 2007) I review all the AAT exam papers at each sitting because I have responsibility for training AAT students at work. I like to try out a few "nuggets" from each paper. I looked at June 2008 PTC and practised Task 2.1. re. the PPR.

Firstly I am baffled by the claims of one poster's tutor that the house referred to in the question is completely exempt ; it isn't, because Rebeca didn't occupy it as a PPR for the entire period of ownership.

It was owned by Rebecca from 1 January 1996 to 1 June 2007, i.e. 137 months (1 January 1996-31 December 2006 is 11 years, i.e. (11 x 12) months i.e. 132 months plus the first 5 months of 2007, making (132 + 5) months i.e. 137 months in all. It doesn't help that there's an odd number of months - would have been far better if it had been complete years - but that would be too easy! Of that 137-month period, during the period from 1 January 2001 to 31 May 2007 (6 years 5 months, i.e. 77 months) Rebecca's house was not (repeat NOT) a PPR because she was living with her parents for that period.

At this point things get complicated. Rebecca's period of living away from her home is not sandwiched between two periods of residency in her home, so there are no conditional reliefs to worry about. However, the final three years (i.e. 36 months) of Rebecca's ownership are regarded as "deemed residence" i.e. HMR&C say she was in residence for their purposes even though, in this case, she was not. What this means is that 36 months is deducted from the 77 months that Rebecca's house was not her PPR, leaving a figure of 41 months which is the length of time that HMR&C say Rebecca's house was NOT her PPR. So what we then have to do is multiply the gain after indexation by (41/137) to arrive at the chargeable gain before taper relief. This process is called time-apportioning and it is the time-apportioned gain which is subject to CGT.

So the caluclation is:
Proceeds £205,000
Less cost (£ 70,000)
Unindexed gain £135,000
Less indexation £(70,000 x 0.083) (£ 5,180)
Gain before time-apportioning £129,180

Time-apportioned gain £(41/137 x 129,190) £38,663

It is this time-apportioned gain that is subject to CGT.

Taper relief will be 10 years (owned after 6/4/98 for 9 years, plus 1 bonus year as it was owned before 6/4/98). At 10 years the applicable TR = 60%

Hope this helps. I know it looks difficult but it would have been even worse if Rebecca have moved in, moved out then subsequently moved back in as you'd have got into "up to 3 years for any reason" conditional reliefs

aer87

agree

I do totally agree with everyone on this site, and its not that we claim its exempt, its all our tutors claim its exempt?

Can AAT not provide us with the solution lol, although seems everyone has doe PPR at time apportion so we should all be ok really?

Frank Wood

MattC wrote: »

Hi Frank

I did the same as you, but my tuutor insists that is was completely exempt as it is the only owned residence,and consequently always the PPR?

I hop this isn`t the case, but as I mentioned earlier, there seems to be no consistency with what people are saying!

I`m hoping the answers are released soon

The answers are now available on the website. Looks like we were right and your tutor was wrong.