ACCA Advanced Taxation (ATX) Practice Exam

Disable ads (and more) with a membership for a one time $4.99 payment

Prepare for the ACCA Advanced Taxation Exam. Use interactive flashcards and multiple-choice questions, complete with hints and comprehensive explanations. Ensure your success on exam day!

Practice this question and more.

True or False: Relevant earnings for pension purposes include property income.

True
False
Only if above a certain threshold
Only for self-employed individuals

The correct answer is: False

The statement that relevant earnings for pension purposes include property income is false. Relevant earnings typically encompass income that is classified as earned income, which mainly includes salary, wages, bonuses, and profits from self-employment. Property income, on the other hand, is considered investment income rather than earned income. This distinction is crucial because pension contributions are primarily calculated on earned income. Consequently, property income does not contribute to the threshold for pension contributions or the calculation of relevant earnings. In the context of pension schemes, only specific types of income qualify as relevant for contribution purposes, which do not include passive income sources like rental income. Thus, the characterization of property income as non-relevant earnings for pension calculations stands firm within the applicable regulations.