AAT Practice Exam 2, Task 5
Welshie999
Registered Posts: 8
in Personal Tax
Hello All,
Can somebody explain to me why, in this example here, Mary has not utilised the Property Allowance of £1,000 against 29 Main Rd and/or 35 London St? I was led to believe that if a property had costs of less than £1,000 then this allowance was available and should be used to reduce profits....
From looking at the question, the comment about claiming all possible allowances seems to point to the fact that she would be willing to use the allowance. Can you help?!?
Also, just a couple of other things:
What does the comment "Mary has not made any elections" mean? I think it may be important somehow..... :-)
With a multiple property portfolio like this, can the £1,000 property allowance be split between more than one property, say £500 each for Main Rd and London St?
Your answers and patience are both warmly appreciated - I don't work in an accountancy setting, so you're all I got!
Welshie
Can somebody explain to me why, in this example here, Mary has not utilised the Property Allowance of £1,000 against 29 Main Rd and/or 35 London St? I was led to believe that if a property had costs of less than £1,000 then this allowance was available and should be used to reduce profits....
From looking at the question, the comment about claiming all possible allowances seems to point to the fact that she would be willing to use the allowance. Can you help?!?
Also, just a couple of other things:
What does the comment "Mary has not made any elections" mean? I think it may be important somehow..... :-)
With a multiple property portfolio like this, can the £1,000 property allowance be split between more than one property, say £500 each for Main Rd and London St?
Your answers and patience are both warmly appreciated - I don't work in an accountancy setting, so you're all I got!
Welshie
0
Best Answer
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The Property Allowance is claimable against total property income, so the actual expenses here are £500 + £1,170 and therefore more than the £1,000 allowance.
Mary could still have elected for partial relief but it wouldn't have been beneficial. The question however, wanted to make clear that she didn't.
AAT
Level 2 - 2011
Level 3 - 2012
Level 4 - 2013
ACCA
F4 - Corporate Law - Dec 2015 (passed)
F5 - Performance Management - Dec 2014 (passed)
F6 - Taxation - Dec 2013 (passed)
F7 - Financial Reporting - Jun 2014 (passed)
F8 - Audit & Assurance - Dec 2015 (passed)
F9 - Financial Management - Jun 2015 (passed)5
Answers
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Legend! Thanks Clint!0