(c) Briefly outline the corporation tax (CT) issues that Tay Limited should consider when deciding whether toacquire the shares or the assets of Tagus LDA. You are not required to discuss issues relating to transferpricing. (7 marks)
(c) Briefly outline the corporation tax (CT) issues that Tay Limited should consider when deciding whether to
acquire the shares or the assets of Tagus LDA. You are not required to discuss issues relating to transfer
pricing. (7 marks)
相关考题：
(c) Briefly describe five factors to be taken into account when deciding whether to use recruitment consultants.(5 marks)
(b) Discuss the nature of the following issues in developing IFRSs for SMEs.(i) The purpose of the standards and the type of entity to whom they should apply. (7 marks)
(e) Briefly discuss FOUR initiatives that management might consider in order to further enhance profitability.(4 marks)
(d) Comment on THREE factors other than NPV that the directors of ITL should consider when deciding whetherto manufacture the Snowballer. (3 marks)
Assume that the corporation tax rates for the financial year 2004 apply throughout.(b) Explain the corporation tax (CT) and value added tax (VAT) issues that Irroy should be aware of, if sheproceeds with her proposal for the Irish subsidiary, Green Limited. Your answer should clearly identify thosefactors which will determine whether or not Green Limited is considered UK resident or Irish resident andthe tax implications of each alternative situation.You need not repeat points that are common to each situation. (16 marks)
(ii) Briefly outline the tax consequences for Henry if the types of protection identified in (i) were to beprovided for him by Happy Home Ltd compared to providing them for himself. You are not required todiscuss the corporation tax (CT) consequences for Happy Home Ltd. (4 marks)
(c) Outline the ways in which Arthur and Cindy can reduce their income tax liability by investing in unquotedshares and recommend, with reasons, which form. of investment best suits their circumstances. You are notrequired to discuss the qualifying conditions applicable to the investment vehicle recommended. (5 marks)You should assume that the income tax rates and allowances for the tax year 2005/06 apply throughout thisquestion
(d) Explain how Gloria would be taxed in the UK on the dividends paid by Bubble Inc and the capital gains taxand inheritance tax implications of a future disposal of the shares. Clearly state, giving reasons, whether ornot the payment made to Eric is allowable for capital gains tax purposes. (9 marks)You should assume that the rates and allowances for the tax year 2005/06 apply throughout this question.
(c) Explain the capital gains tax (CGT) and income tax (IT) issues Paul and Sharon should consider in decidingwhich form. of trust to set up for Gisella and Gavin. You are not required to consider inheritance tax (IHT) orstamp duty land tax (SDLT) issues. (10 marks)You should assume that the tax rates and allowances for the tax year 2005/06 apply throughout this question.
(b) Peter, one of Linden Limited’s non-executive directors, having lived and worked in the UK for most of his adultlife, sold his home near London on 22 March 2006 and, together with his wife (a French citizen), moved to livein a villa which she owns in the south of France. Peter is now demanding that the tax deducted from his director’sfees, for the board meetings held on 18 April and 16 May 2006, be refunded, on the grounds that, as he is nolonger resident in the UK, he is no longer liable to UK income tax. All of the company’s board meetings are heldat its offices in Cambridge.Despite Peter’s assurance that none of the other companies of which he is a director has disputed his change oftax status, Damian is uncertain whether he should make the refunds requested. However, as Peter is a friend ofthe company’s founder, Linden Limited’s managing director is urging him to do so, stating that if the tax doeshave to be paid, then Linden Limited could always bear the cost.Required:Advise Damian whether Peter is correct in his assertion regarding his tax position and in the case that thereis a UK tax liability the implications of the managing director’s suggestion. You are not required to considernational insurance (NIC) issues. (4 marks)
(c) For commercial reasons, Damian believes that it would be sensible to place a new holding company, Bold plc,over the existing company, Linden Limited. Bold plc would also be unquoted and would acquire the existingLinden Limited shares in exchange for the issue of its own shares.If the new structure is implemented, Bold plc will provide management services to Linden Limited, but theamount that will be charged for these services is yet to be determined.Required:(i) State the capital gains tax (CGT) issues that Damian should be aware of before disposing of his sharesin Linden Limited to Bold plc. Your answer should include details of any conditions that will need to besatisfied if an immediate charge to tax is to be avoided. (4 marks)
(iii) State the value added tax (VAT) and stamp duty (SD) issues arising as a result of inserting Bold plc asa holding company and identify any planning actions that can be taken to defer or minimise these taxcosts. (4 marks)You should assume that the corporation tax rates for the financial year 2005 and the income tax ratesand allowances for the tax year 2005/06 apply throughout this question.
(ii) Calculate the corporation tax (CT) payable by Tay Limited for the year ended 31 March 2006, takingadvantage of all available reliefs. (3 marks)
(iii) Explain the potential corporation tax (CT) implications of Tay Limited transferring work to Trent Limited,and suggest how these can be minimised or eliminated. (3 marks)
(iii) The effect of the restructuring on the group’s ability to recover directly and non-directly attributable inputtax. (6 marks)You are required to prepare calculations in respect of part (ii) only of this part of this question.Note: – You should assume that the corporation tax rates and allowances for the financial year 2006 applythroughout this question.
(c) On the assumption that the administrators of Noland’s estate will sell quoted shares in order to fund theinheritance tax due as a result of his death, calculate the value of the quoted shares that will be available totransfer to Avril. You should include brief notes of your treatment of the house and the shares in Kurb Ltd.(9 marks)Note: you should assume that the tax rates and allowances for the tax year 2006/07 apply throughout thisquestion.
(ii) Explain why Galileo is able to pay the inheritance tax due in instalments, state when the instalments aredue and identify any further issues relevant to Galileo relating to the payments. (3 marks)
(c) During the year Albreda paid $0·1 million (2004 – $0·3 million) in fines and penalties relating to breaches ofhealth and safety regulations. These amounts have not been separately disclosed but included in cost of sales.(5 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Albreda Co for the year ended30 September 2005.NOTE: The mark allocation is shown against each of the three issues.
5 You are an audit manager in Dedza, a firm of Chartered Certified Accountants. Recently, you have been assignedspecific responsibility for undertaking annual reviews of existing clients. The following situations have arisen inconnection with three client companies:(a) Dedza was appointed auditor and tax advisor to Kora Co, a limited liability company, last year and has recentlyissued an unmodified opinion on the financial statements for the year ended 30 June 2005. To your surprise,the tax authority has just launched an investigation into the affairs of Kora on suspicion of underdeclaring income.(7 marks)Required:Identify and comment on the ethical and other professional issues raised by each of these matters and state whataction, if any, Dedza should now take.NOTE: The mark allocation is shown against each of the three situations.
3 You are the manager responsible for the audit of Keffler Co, a private limited company engaged in the manufacture ofplastic products. The draft financial statements for the year ended 31 March 2006 show revenue of $47·4 million(2005 – $43·9 million), profit before taxation of $2 million (2005 – $2·4 million) and total assets of $33·8 million(2005 – $25·7 million).The following issues arising during the final audit have been noted on a schedule of points for your attention:(a) In April 2005, Keffler bought the right to use a landfill site for a period of 15 years for $1·1 million. Kefflerexpects that the amount of waste that it will need to dump will increase annually and that the site will becompletely filled after just ten years. Keffler has charged the following amounts to the income statement for theyear to 31 March 2006:– $20,000 licence amortisation calculated on a sum-of-digits basis to increase the charge over the useful lifeof the site; and– $100,000 annual provision for restoring the land in 15 years’ time. (9 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended31 March 2006.NOTE: The mark allocation is shown against each of the three issues.
(b) A sale of industrial equipment to Deakin Co in May 2005 resulted in a loss on disposal of $0·3 million that hasbeen separately disclosed on the face of the income statement. The equipment cost $1·2 million when it waspurchased in April 1996 and was being depreciated on a straight-line basis over 20 years. (6 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended31 March 2006.NOTE: The mark allocation is shown against each of the three issues.
(c) In April 2006, Keffler was banned by the local government from emptying waste water into a river because thewater did not meet minimum standards of cleanliness. Keffler has made a provision of $0·9 million for thetechnological upgrading of its water purifying process and included $45,000 for the penalties imposed in ‘otherprovisions’. (5 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Keffler Co for the year ended31 March 2006.NOTE: The mark allocation is shown against each of the three issues.
(c) In November 2006 Seymour announced the recall and discontinuation of a range of petcare products. Theproduct recall was prompted by the high level of customer returns due to claims of poor quality. For the year to30 September 2006, the product range represented $8·9 million of consolidated revenue (2005 – $9·6 million)and $1·3 million loss before tax (2005 – $0·4 million profit before tax). The results of the ‘petcare’ operationsare disclosed separately on the face of the income statement. (6 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.
(c) Lamont owns a residential apartment above its head office. Until 31 December 2006 it was let for $3,000 amonth. Since 1 January 2007 it has been occupied rent-free by the senior sales executive. (6 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Lamont Co for the year ended31 March 2007.NOTE: The mark allocation is shown against each of the three issues.
(b) (i) Explain the matters you should consider to determine whether capitalised development costs areappropriately recognised; and (5 marks)
(c) Prepare briefing notes, to be used by an audit partner in your firm, assessing the professional, ethical andother issues to be considered in deciding whether to proceed with the appointment as auditor of Medix Co.Note: requirement (c) includes 2 professional marks. (12 marks)
(c) Discuss the quality control issues raised by the audit senior’s comments. (3 marks)