Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Alternative ways of achieving personal or business outcomes and their tax consequences

Brindle Ltd buys a freehold warehouse (non-residential, standard-rated option not relevant) for £400,000 from an unconnected seller. Using the non-residential SDLT rates in the tax tables (0% to £150,000, 2% on £150,001-£250,000, 5% above £250,000), what is the SDLT payable?

The SDLT is £9,500. Non-residential SDLT is charged in slices: nil on the first £150,000, 2% on the next £100,000 (£2,000) and 5% on the remaining £150,000 (£7,500), giving £9,500 in total.

  1. A£9,500Correct
  2. B£8,000
  3. C£20,000
  4. D£11,500

Explanation

Slab calculation: 0% on the first £150,000 = £0; 2% on £100,000 = £2,000; 5% on £150,000 = £7,500. Total £9,500. £8,000 is wrong because it applies 2% to £400,000 less £0 incorrectly; £20,000 applies 5% to the whole price, ignoring that the rates are marginal.

Did you get it right without looking?

One question tells you little. A timed set on Alternative ways of achieving personal or business outcomes and their tax consequences shows your real accuracy, how long you take and where you lose marks.

Practise Alternative ways of achieving personal or business outcomes and their tax consequencesFree diagnostic mock

More Alternative ways of achieving personal or business outcomes and their tax consequences questions