ACCA Taxation (F6) Practice Exam

Can an individual in job-related accommodation designate another property as their main residence?

1. No, they cannot designate any other property

2. Yes, but only if they occupy it part-time

3. Yes, and there is no requirement to establish actual occupation

4. Only if they have declared it on their taxes

The correct answer is: Yes, and there is no requirement to establish actual occupation

An individual in job-related accommodation can indeed designate another property as their main residence, and they do not need to establish actual occupation of that property to make this designation. This means that even if they are not living in that property full-time, they can still choose it as their main residence for tax purposes. This provision is designed to accommodate individuals who may be required to live away from home due to work commitments but still maintain ownership or connection to another property which they consider their main home. The flexibility of this designation allows individuals to plan their tax affairs more effectively, particularly in terms of capital gains tax implications, as the main residence relief can significantly influence any future selling of that property. This aligns with the tax principles which recognize the personal circumstances of individuals and their need for accommodating work situations. In contrast, the other options limit this flexibility. For instance, suggesting that an individual cannot designate any other property or placing conditions like requiring part-time occupancy would restrict the ability to claim main residence status, which is not how the tax rules are structured. Lastly, the idea of needing to declare it on taxes to designate it as main residence misrepresents the nature of residential relief, as the choice can be made independent of formal declaration in the tax filings.