ExpertMedium2 marksMultiple Choice
ACCA · Question 03 · Income tax and national insurance contributions
Section A
Sylvia owns a large converted barn which is her main residence. During 2023/24, she let out two furnished rooms to eco-tourists, receiving total rent of £8,200. She incurred allowable expenses of £1,400 related to the letting.
Assuming Sylvia wishes to minimize her taxable income, what is her taxable property income for 2023/24?
Section A
Sylvia owns a large converted barn which is her main residence. During 2023/24, she let out two furnished rooms to eco-tourists, receiving total rent of £8,200. She incurred allowable expenses of £1,400 related to the letting.
Assuming Sylvia wishes to minimize her taxable income, what is her taxable property income for 2023/24?
Answer options:
A.
£0
B.
£700
C.
£6,800
D.
£8,200
How to approach this question
Compare the normal property income calculation (Rent - Expenses) with the Rent-a-Room relief calculation (Rent - £7,500 limit) and choose the lowest.
Full Answer
B.£700✓ Correct
Sylvia can choose between the normal basis (Rent £8,200 - Expenses £1,400 = £6,800) or the rent-a-room relief basis (Rent £8,200 - Exemption £7,500 = £700). To minimize taxable income, she will claim rent-a-room relief, resulting in £700 taxable income.
Common mistakes
Deducting both the £7,500 exemption AND the actual expenses.
Practice the full ACCA TX — Taxation Practice Exam 3
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