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P6 Advance Taxation (ATX – UK)
It builds on the foundations of Paper F6 Taxation in two ways. First, it introduces more advanced taxation topics in relation to inheritance tax and specialized personal and corporate tax. Second, it requires the ability to communicate clearly with clients, HM Revenue Customs and other professionals in a clear and professional manner.It is an options paper which will be chosen by those who want to work in a tax environment.
Remember: All these articles are taken from ACCA Official Website. We have just compiled all those articles into One PDF Document for the convenience of the students.Members of the P6 examination team have written several articles in Student Accountant which are also available on the ACCA website. There are four non-technical articles that focus on the structure of the exam and exam technique. These are Stepping up from Paper F6(UK) Taxation to Paper P6(UK) Advanced Taxation, Examiner’s approach to Paper P6 (UK) Advanced Taxation, Guidance on answering questions in Section A of Paper P6 (UK), and Improving your performance in Paper P6 (UK). There are also technical articles covering the following topics: Exam technique and fundamental technical issues for Paper P6 (UK), Taxation of the unincorporated business – the new business, Taxation of the unincorporated business – the existing business, International aspects of personal taxation, Inheritance tax and capital gains tax for P6, Trusts and tax for P6, Corporation tax for P6, Corporation tax– group relief for P6, Corporation tax– groups and chargeable gains for P6, and Finance Acts 2019. Make sure you read these articles to gain further insight into what the examination team is looking for.
1 What P6 is about
The P6 syllabus builds on the basic knowledge of core taxes gained from F6 and introduces candidates to additional capital taxes in the form of stamp duty, stamp duty reserve tax and stamp duty land tax. It also extends knowledge of income tax, inheritance tax, corporation tax and capital gains taxes, including overseas aspects, taxation of trusts and additional exemptions and reliefs.The emphasis of the paper is on the candidate’s skills of analysis and interpretation of information provided and communication of recommendations in a manner appropriate to the intended audience e.g. clients. Computations will normally only be required in support of explanations or advice and not in isolation.
2 What skills are required?
- Be able to calculate tax charges in support of explanations or advice.
- Be able to explain the tax charges in a particular scenario: what taxes are applicable and why.
- Be able to analyse a set of facts to ascertain when tax charges arise and any options that may be available to the taxpayer to mitigate such charges.
- Be able to evaluate your results and recommend a course of action, justifying your recommendations and setting out any other factors which the taxpayer should take into account when reaching his decision.
3 How to improve your chances of passing
Study the entire syllabus – 60 marks of the marks available to you are contained in the compulsory Section A questions. Section B questions allow you to show more specialized knowledge and allow the examination team to test a wide range of topics.Practice as many questions as you can under timed conditions – this is the best way of developing good exam technique. Make use of the Practice Question Bank at the back of this Text. Your Practice and Revision Kit contains numerous exam standard questions (many of them taken from past exam papers) as well as three mock exams for you to try.
Answer selectively – the examination team will expect you to consider carefully what is relevant and significant enough to include in your answer. Don't include unnecessary information.
Present your answers in a professional manner – use subheadings and leave spaces between paragraphs, make sure that your numerical workings are clearly set out.
Answer all parts of the question – leaving out a five-mark part may be the difference between a pass and a fail.
4 Brought forward knowledge
The P6 syllabus covers almost every topic that was included in F6 Taxation, with a few minor exceptions. Since tax law changes every year, this text includes all the topics covered at F6 again, updated to the latest Finance Act(s). At the start of each chapter, we highlight topics which have changed between the latest Finance Act(s) and the previous Finance Act. We also highlight new topics which you have not studied at F6.5 Gaining professional marks
As P6 Advanced Taxation is a Professional level paper, four professional marks will be awarded in Question 1. Professional marks will usually be awarded for overall presentation of the required letter or memorandum, the provision of relevant advice and the effectiveness with which the information is communicated.Whatever the form of communication requested; you will not gain professional marks if you fail to follow the basics of good communication. Keep an eye on your spelling and grammar. Also think carefully, am I saying things that are appropriate in a business communication?
Revising P6
Topics to revise
First, we must emphasize that you will need a good knowledge of the entire syllabus. This means learning /memorizing the rules in order to answer questions. The exam team has commented that it is a lack of accurate knowledge that causes problems for many candidates during the exam.Any part of the syllabus could be tested within the mandatory Section A. That said, there are certain issues that are particularly important:
- The calculation of the income tax payable, including the limitation/restrictions of personal allowances and income tax credits.
- Personal pension plans/schemes, in particular, the annual allowance charge and the annual allowance.
- The basis of the evaluation for companies that are not incorporated in society, including rules on startup and termination. Do not neglect the impact of losses in these situations.
- The calculation of employment benefits so you can make reasonable comparisons between compensation/remuneration packages. Make sure you can also advise on tax-free benefits as well. The rules for share plans/schemes and termination payments must be well known
- The structure and mechanics of inheritance tax (for example, transfer types, nil/zero-rate band, seven-year syllabus)
- Exemptions and reliefs available for different taxes, in particular for capital gains tax (for example, exemption of business owners (entrepreneurs' relief), exemption/relief of gifts, rollover (reinvestment) relief) and inheritance tax (for example, exemption of spouse, exemption/relief commercial property) Exemptions and reliefs are the basis of any tax planning
- The calculation of corporate tax, including dealing with loan relationships, intangible assets, and research and development expenses/expenditures.
- Close/Nearby companies, including the position of the participants.
- All aspects of corporate tax groups, including the impact of 51% related group companies, loss relief, chargeable/taxable gains groups, the effect of group VAT registration and stamp tax groups. You must pay special attention to the impact on corporate restructuring.
- For value-added tax, land and building rules, capital goods scheme, special VAT schemes available for small businesses so you can advise if appropriate and partial exemption rules
- Overseas/Foreign aspects of income tax, CGT, IHT, corporate tax and VAT
- Tax administration, including filing dates, fines, and interest for all taxes.
- Ethical considerations when acting for clients
Practice questions
You should use the Passcards or Pocket Notes and any brief notes you have to review/revise these topics, but you should not spend all your revising time reading passively. The practice of the questions is vital; Practicing all the questions you can in full will help you develop your skills and ability to analyze scenarios and produce relevant debates/discussions and recommendations.You should make sure to allow enough time to yourself during your revision to practice the questions in Section A, as you cannot avoid them, and the scenarios and requirements of the questions in Section A are more complex than the Questions in Section B. You should also allow yourself enough time to do all three mock exams.
Passing the P6 exam
Avoid weaknesses
We give details of the comments and criticisms of the examination team at various points throughout this Kit. These reports always emphasize the need to demonstrate a fairly broad knowledge of the syllabus, but also to identify and justify the availability (or non-availability) of exemptions and particular reliefs. There are several things you can do on exam day to increase your chances. Although all this sounds basic, the exam team has commented that the scripts show:- A failure to read the question and requirements properly and answer the set of questions, instead of producing irrelevant `` pieces ''
- Clear evidence of poor time management
- Tendency to confuse CGT and IHT and even personal and corporate tax issues
Finally, never cross out your work. These may be correct and you will not be given credit if you have crossed out the working.
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