Do you have any exam technique regarding residency status for employment income? I find it hard to approach a question as I'm never sure which tests to do first/in what order/how to lay it out etc
Hi Elly, Yes, we have a video class on the topic. The class is called '13. BPT: Income Tax - International'. You can find it in the Video Course section of the BPT page. Here is the link: www.acamasters.com/business-planning-tax All the best for your exam. Please let us know how you get on.
Having a good open book reference is good for this. The open book is a blessing and a curse, since the exam content is far too wide to be able to remember everything, but the open book can sap your time if you rely on it too much. Automatic residency tests are quite detailed and it's one of the areas worth relying on the open book for. ACA Masters notes provide a good summary of the residence tests. In the question itself, it's usually obviously signaled, by the information in the scenario, which residence tests you should start with. A good starting point is to see where the person is moving/based permanently and for what reason. You will pick up on the patterns as to what is most examined through doing the QB. For example, a classic example is someone who moves abroad from the UK in the middle of the tax year. They provide some (limited) information as to how long they're out of the country, times they might visit back to the UK, how long they're working abroad, etc. If the emphasis is on work then you know to look at the base test, number of days, and then full time work tests. If the person is leaving in the middle of the year then that's a signal to look at the split-year treatment. But do this after you have established the likely residence status of the person in the previous tax year and the following tax year to the one being examined in the question, because this is one of the conditions for whether the split-year treatment can apply. Always establish whether the person is UK domiciled or non-domiciled (also consider deemed domicile status). If non-resident but UK domiciled then you can pick up easy explanation mark for mentioning option for remittance basis and implications thereof (no PA, no AEA, RBU charge). A feature in basically all residence questions I did was that the information is ambiguous. The information is rarely complete in BPT and there's always some doubt. You can always pick up easy marks for acknowledging the ambiguity in the residence information and stating that you'd need more information to confirm x or y about x or y residence test. The "sufficient ties" stuff features quite heavily in my Kaplan workbook but I've only ever seen it tested once in detail. I've only ever seen it even mentioned a couple of times. This is one of those areas that doesn't come up enough to spend a lot of time learning. Usually, the question is over automatic residence tests and the implications of your choice. In my recent June 2022 exam, employment income was tested but it was simply stated that the worker was working "full time" abroad with no info about visits to the UK etc. This is a classic example of BPT. The depth of the content is very shallow, but the information is incomplete. You just have to make your best guess on the likely residence status based upon well reasoned suppositions, and state that more information is required. Then take your likely residence status guess and discuss what would happen IF this were the case. If you're struggling with this particular type of question, use ACA masters master plan in the income tax section to smash out loads of international questions one after the other and you'll pick up on the patterns. A lot of this knowledge can't be taught as such and is just tacit knowledge picked up from soaking in the trends of scenarios that are examined in this area.
Hello, Thanks for your message. Our 2024 BPT Video Course includes a technical class and several questions on ‘starting a business’. The videos are titled ‘starting a business’. Please note that there is a course structure on the BPT page of the ACA Masters website.
Do you have any exam technique regarding residency status for employment income? I find it hard to approach a question as I'm never sure which tests to do first/in what order/how to lay it out etc
Hi Elly,
Yes, we have a video class on the topic.
The class is called '13. BPT: Income Tax - International'. You can find it in the Video Course section of the BPT page. Here is the link:
www.acamasters.com/business-planning-tax
All the best for your exam. Please let us know how you get on.
Having a good open book reference is good for this. The open book is a blessing and a curse, since the exam content is far too wide to be able to remember everything, but the open book can sap your time if you rely on it too much. Automatic residency tests are quite detailed and it's one of the areas worth relying on the open book for. ACA Masters notes provide a good summary of the residence tests.
In the question itself, it's usually obviously signaled, by the information in the scenario, which residence tests you should start with. A good starting point is to see where the person is moving/based permanently and for what reason. You will pick up on the patterns as to what is most examined through doing the QB.
For example, a classic example is someone who moves abroad from the UK in the middle of the tax year. They provide some (limited) information as to how long they're out of the country, times they might visit back to the UK, how long they're working abroad, etc. If the emphasis is on work then you know to look at the base test, number of days, and then full time work tests.
If the person is leaving in the middle of the year then that's a signal to look at the split-year treatment. But do this after you have established the likely residence status of the person in the previous tax year and the following tax year to the one being examined in the question, because this is one of the conditions for whether the split-year treatment can apply.
Always establish whether the person is UK domiciled or non-domiciled (also consider deemed domicile status). If non-resident but UK domiciled then you can pick up easy explanation mark for mentioning option for remittance basis and implications thereof (no PA, no AEA, RBU charge).
A feature in basically all residence questions I did was that the information is ambiguous. The information is rarely complete in BPT and there's always some doubt. You can always pick up easy marks for acknowledging the ambiguity in the residence information and stating that you'd need more information to confirm x or y about x or y residence test.
The "sufficient ties" stuff features quite heavily in my Kaplan workbook but I've only ever seen it tested once in detail. I've only ever seen it even mentioned a couple of times. This is one of those areas that doesn't come up enough to spend a lot of time learning. Usually, the question is over automatic residence tests and the implications of your choice.
In my recent June 2022 exam, employment income was tested but it was simply stated that the worker was working "full time" abroad with no info about visits to the UK etc. This is a classic example of BPT. The depth of the content is very shallow, but the information is incomplete. You just have to make your best guess on the likely residence status based upon well reasoned suppositions, and state that more information is required. Then take your likely residence status guess and discuss what would happen IF this were the case.
If you're struggling with this particular type of question, use ACA masters master plan in the income tax section to smash out loads of international questions one after the other and you'll pick up on the patterns. A lot of this knowledge can't be taught as such and is just tacit knowledge picked up from soaking in the trends of scenarios that are examined in this area.
@@keelanwaldron4389 Thank you for this, I sat the June 2022 exam and wasn't able to pass this time round but this sort guidance/tips is super helpful.
Is there a 2024 version of this ? I have the course but can’t seem to find it !
Hello,
Thanks for your message.
Our 2024 BPT Video Course includes a technical class and several questions on ‘starting a business’. The videos are titled ‘starting a business’. Please note that there is a course structure on the BPT page of the ACA Masters website.