P6 acca

Income tax liabilities

1. The scope of income tax

a) Explain how the residence of an

individual is determined.[1]

b) Explain the treatment of a person

who comes to South Africa to work or

a person who leaves South Africa to

take up employment overseas.[1]

Income from employment

a) Recognise the factors that determine

whether an engagement is treated as

employment or an independent

trade.[2]

b) Recognise the basis of assessment

for employment income.[2]

c) Compute the income assessable.[2]

d) Recognise the allowable

deductions.[2]

e) Discuss the use of travel and other

allowances.[2]

f) Explain the employees tax system.[1]

g) Compute the amount of employee

benefits assessable.

Income from independent trades

a) Recognise the basis of assessment

for independent trade income.[2]

b) Define ‘trade’ and distinguish

between ‘carrying on a business’ and

‘carrying on a trade’. [1]

c) Recognise the expenditure that is

allowable in calculating taxable

income. [2]

d) Recognise the relief that can be

obtained for pre-trade expenditure.[2]

e) Capital allowances

i) Define plant and

machinery for capital

allowances purposes [2]

ii) Compute wear and tear

allowances [2]

iii) Compute manufacturing

buildings allowance [2]

iv) Compute the commercial

buildings allowance

v) Compute the tax effects on

the disposal of a capital

asset [2]

f) Relief for assessed losses

i) Understand how trading

losses can be carried

forward [2]

Property and investment income

a) Compute taxable income from

property. [2]

b) Distinguish between taxable and

exempt investment income. [2]

c) Compute withholding taxes on

passive income [2]

The comprehensive computation

of taxable income and income tax

liability

a) Prepare a basic income tax

computation involving different types

of income. [2]

b) Identify and quantify exempt income

and deductions and capital

allowances. [2]

c) Compute the amount of income tax

payable. [2]

d) Compute the amount of employee’s

tax payable in the case of

employees. [2]

e) Calculate medical tax credits. [2

The use of exemptions and reliefs

in deferring and minimising

income tax liabilities

a) Explain and compute the relief given

for contributions to personal

retirement schemes.[2]

b) Explain and compute the relief given

for donations to public benefit

organisations. [2]

The comprehensive computation

of taxable income and income tax

liability

a) Prepare a basic income tax

computation involving different types

of income. [2]

Company tax liabilities

1. The scope of company tax

a) Define the terms ‘accounting period’,

and ‘financial year’.[1]

b) Explain how the residence of a

company is determined.[2]

c) Define a small business corporation

and calculate the company tax.[1]

d) Identify and calculate turnover tax for

micro businesses (as for

individuals). [2]

Profits chargeable to company tax

a) Recognise gross income. [1]

b) Recognise the expenditure that is

allowable in calculating taxable

income.[2]

c) Explain how relief can be obtained for

pre-trade expenditure.[1]

d) Explain and apply the tax deduction

available for companies engaged in

research and development.

e) Compute capital allowances (as for

income tax)

f) Explain the treatment of interest paid

and received.[2]

g) Understand how trading losses can

be carried forward.[2]

h) Compute the taxable income for

companies, including small business

corporations.[2]

The comprehensive computation

of company tax liability

a) Compute the normal tax liability for

companies, including for small

business corporations and micro

businesses.[2]