Question 1

Section B - Case 1: Quantum Aquatics

Zara and Felix run 'Quantum Aquatics', a partnership specializing in hydro-electric turbine maintenance. They share profits in the ratio 3:2. The partnership has always prepared accounts to 31 December. On 30 September 2023, Felix retired, and Zara continued as a sole trader. The partnership's tax adjusted trading profit for the 9-month period to 30 September 2023 was £90,000.

What is the basis period for Felix's final tax year (2023/24)?

Accepted Answer

Apply the cessation rules for basis periods. The final basis period runs from the end of the basis period for the previous tax year to the date of cessation.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming the basis period must always be 12 months, even in the year of cessation.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 3

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