ACCA Taxation (F6) Practice Exam

Which assets are considered chargeable business assets?

1. All non-business assets including artworks

2. Only real estate used in business

3. Chargeable assets excluding non-business assets

4. All types of investments

The correct answer is: Chargeable assets excluding non-business assets

Chargeable business assets refer to those assets that are subject to capital gains tax upon disposal and are used within the context of a business. These typically include assets such as property, plant, equipment, or any investments that have been made specifically for the purpose of generating business income. The correct answer identifies chargeable assets while excluding those that do not qualify as business assets, such as personal investments or artworks that are not used in a business capacity. By focusing on chargeable assets that are business-related, this option aligns with the taxation principles where only assets actively utilized in the business are recognized for capital gains purposes. In contrast, the other choices incorporate a broader set of assets or incorrectly include assets considered personal or non-business. For example, non-business assets, like artworks, would not be classified as chargeable business assets if they are not directly associated with a business income-generating activity. Notably, real estate used solely for residential purposes would also not qualify if it's not part of a business operation. By pinpointing chargeable assets while explicitly excluding non-business elements, the selected answer aligns with the standard definitions in taxation concerning capital gains and the nature of business assets, making it the correct choice.