Question 1

Section A

Fiona owned a house for 10 years (120 months) before selling it. She lived in it as her main residence for the first 4 years (48 months). She then worked abroad for 3 years (36 months). Upon returning, she lived in a rented flat for 2 years (24 months) while the house remained empty, before finally moving back into the house for the last 1 year (12 months).

How many months of ownership will qualify for Principal Private Residence (PPR) relief?

Accepted Answer

Identify periods of actual occupation. Then identify periods of deemed occupation (working abroad, any reason up to 3 years) ensuring they are preceded and followed by actual occupation. Add the last 9 months rule if applicable (though here she lived in it at the end anyway).

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Thinking the 'any reason' absence and 'working abroad' absence cannot be combined, or forgetting that returning to the property validates the deemed absences.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 3

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