ACCA Taxation (F6) Practice Exam

What is defined as a chattel?

1. Intangible assets

2. Non-transferable property

3. Tangible, moveable property

4. Assets with a lifespan exceeding 50 years

The correct answer is: Tangible, moveable property

A chattel is defined as tangible, moveable property. This classification includes items that can be physically moved from one location to another, such as furniture, vehicles, and equipment. Chattels are distinct from real property, which refers to land and anything permanently affixed to it, such as buildings. The notion of tangibility is crucial here, as it differentiates chattels from intangible assets, which do not have a physical presence, such as patents, copyrights, or trademarks. Understanding this distinction helps in various areas of taxation and property law, where the treatment of chattels may differ substantially from that of intangible assets. Additionally, chattels must be movable, which stands in contrast to non-transferable property, implying that chattels can indeed be sold or transferred to another party. The concept of chattels is also not confined by a lifespan requirement, so assets that exceed a 50-year lifespan, such as certain types of buildings or fixtures, do not qualify as chattels. This understanding of movable property and its characteristics is essential for anyone working in taxation or property management.