ACCA Advanced Taxation (ATX) Practice Exam

True or False: An individual's Personal Allowance will be unavailable if the remittance basis is claimed.

1. True

2. False

3. Only in specific cases

4. True, but only for non-residents

The correct answer is: False

The statement is false. When an individual claims the remittance basis, they can still be entitled to their Personal Allowance, provided they are resident in the UK and their income is below certain thresholds. The remittance basis allows people to be taxed only on their UK income and any foreign income that they bring into the UK. However, it's important to note that those who are non-resident generally do not receive a Personal Allowance, regardless of whether they claim the remittance basis or not because the Personal Allowance is specifically reserved for individuals who are considered resident in the UK for tax purposes. Thus, while the remittance basis itself can limit the income subject to UK tax, it doesn't inherently eliminate the availability of the Personal Allowance for qualifying residents. It's crucial for individuals to understand their residency status and the implications for tax allowances on their overall tax liability.