(b) Explain the advantages from a tax point of view of operating the new business as a partnership rather thanas a company whilst it is making losses. You should calculate the tax adjusted trading loss for the yearending 31 March 2008 for both situations and indicate the years in which the loss relief will be obtained.You are not required to prepare any other supporting calculations. (10 marks)
(b) Explain the advantages from a tax point of view of operating the new business as a partnership rather than
as a company whilst it is making losses. You should calculate the tax adjusted trading loss for the year
ending 31 March 2008 for both situations and indicate the years in which the loss relief will be obtained.
You are not required to prepare any other supporting calculations. (10 marks)
相关考题：
– ()– Yes, I will try my best. A、Do you know about business tax?B、What do you think about business tax?C、Can you give me a brief introduction about business tax?
(b) Assuming that Thai Curry Ltd claims relief for its trading loss against total profits under s.393A ICTA 1988,calculate the company’s corporation tax liability for the year ended 30 September 2005. (10 marks)
(c) Assuming that Joanne registers for value added tax (VAT) with effect from 1 April 2006:(i) Calculate her income tax (IT) and capital gains tax (CGT) payable for the year of assessment 2005/06.You are not required to calculate any national insurance liabilities in this sub-part. (6 marks)
For this part, assume today’s date is 15 August 2005.5 (a) Donald is aged 22, single, and about to finish his university education. He has plans to start up a business sellingcomputer games, and intends to start trading on 1 April 2006, making up accounts to 31 March annually.He believes that his business will generate cash (equal to taxable profits) of ￡47,500 in the first year. Heoriginally intended to operate as a sole trader, but he has recently discovered that as an alternative, he couldoperate through a company. He has been advised that if this is the case, he can take a maximum gross salaryof ￡42,648 out of the company.Required:(i) Advise Donald on the income tax (IT), national insurance (NIC) and corporation tax (CT) liabilities hewill incur for the year ended 31 March 2007 trading under each of the two alternative businessstructures (sole trade/company). Your advice should be supported by calculations of disposable incomefor both alternatives assuming that in the company case, he draws the maximum salary stated.(7 marks)
3 Assume that today’s date is 10 May 2005.You have recently been approached by Fred Flop. Fred is the managing director and 100% shareholder of FlopLimited, a UK trading company with one wholly owned subsidiary. Both companies have a 31 March year-end.Fred informs you that he is experiencing problems in dealing with aspects of his company tax returns. The companyaccountant has been unable to keep up to date with matters, and Fred also believes that mistakes have been madein the past. Fred needs assistance and tells you the following:Year ended 31 March 2003The corporation tax return for this period was not submitted until 2 November 2004, and corporation tax of ￡123,500was paid at the same time. Profits chargeable to corporation tax were stated as ￡704,300.A formal notice (CT203) requiring the company to file a self-assessment corporation tax return (dated 1 February2004) had been received by the company on 4 February 2004.A detailed examination of the accounts and tax computation has revealed the following.– Computer equipment totalling ￡50,000 had been expensed in the accounts. No adjustment has been made inthe tax computation.– A provision of ￡10,000 was made for repairs, but there is no evidence of supporting information.– Legal and professional fees totalling ￡46,500 were allowed in full without any explanation. Fred hassubsequently produced the following analysis:Analysis of legal professional fees￡Legal fees on a failed attempt to secure a trading loan 15,000Debt collection agency fees 12,800Obtaining planning consent for building extension 15,700Accountant’s fees for preparing accounts 14,000Legal fees relating to a trade dispute 19,000– No enquiry has yet been raised by the Inland Revenue.– Flop Ltd was a large company in terms of the Companies Act definition for the year in question.– Flop Ltd had taxable profits of ￡595,000 in the previous year.Year ended 31 March 2004The corporation tax return has not yet been submitted for this year. The accounts are late and nearing completion,with only one change still to be made. A notice requiring the company to file a self-assessment corporation tax return(CT203) dated 27 July 2004 was received on 1 August 2004. No corporation tax has yet been paid.1 – The computation currently shows profits chargeable to corporation tax of ￡815,000 before accountingadjustments, and any adjustments for prior years.– A company owing Flop Ltd ￡50,000 (excluding VAT) has gone into liquidation, and it is unlikely that any of thismoney will be paid. The money has been outstanding since 3 September 2003, and the bad debt will need tobe included in the accounts.1 Fred also believes there are problems in relation to the company’s VAT administration. The VAT return for the quarterended 31 March 2005 was submitted on 5 May 2005, and VAT of ￡24,000 was paid at the same time. The previousreturn to 31 December 2004 was also submitted late. In addition, no account has been made for the VAT on the baddebt. The VAT return for 30 June 2005 may also be late. Fred estimates the VAT liability for that quarter to be ￡8,250.Required:(a) (i) Calculate the revised corporation tax (CT) payable for the accounting periods ending 31 March 2003and 2004 respectively. Your answer should include an explanation of the adjustments made as a resultof the information which has now come to light. (7 marks)(ii) State, giving reasons, the due payment date of the corporation tax (CT) and the filing date of thecorporation tax return for each period, and identify any interest and penalties which may have arisen todate. (8 marks)
(b) Assuming that the income from the sale of the books is not treated as trading income, calculate Bob’s taxableincome and gains for all relevant tax years, using any loss reliefs in the most tax-efficient manner. Youranswer should include an explanation of the loss reliefs available and your reasons for using (or not using)them. (12 marks)Assume that the rates and allowances for 2004/05 apply throughout this part of the question.
(c) Without changing the advice you have given in (b), or varying the terms of Luke’s will, explain how Mabelcould further reduce her eventual inheritance tax liability and quantify the tax saving that could be made.(3 marks)The increase in the retail prices index from April 1984 to April 1998 is 84%.You should assume that the rates and allowances for the tax year 2005/06 will continue to apply for theforeseeable future.
3 On 1 January 2007 Dovedale Ltd, a company with no subsidiaries, intends to purchase 65% of the ordinary sharecapital of Hira Ltd from Belgrove Ltd. Belgrove Ltd currently owns 100% of the share capital of Hira Ltd and has noother subsidiaries. All three companies have their head offices in the UK and are UK resident.Hira Ltd had trading losses brought forward, as at 1 April 2006, of ￡18,600 and no income or gains against whichto offset losses in the year ended 31 March 2006. In the year ending 31 March 2007 the company expects to makefurther tax adjusted trading losses of ￡55,000 before deduction of capital allowances, and to have no other incomeor gains. The tax written down value of Hira Ltd’s plant and machinery as at 31 March 2006 was ￡96,000 andthere will be no fixed asset additions or disposals in the year ending 31 March 2007. In the year ending 31 March2008 a small tax adjusted trading loss is anticipated. Hira Ltd will surrender the maximum possible trading lossesto Belgrove Ltd and Dovedale Ltd.The tax adjusted trading profit of Dovedale Ltd for the year ending 31 March 2007 is expected to be ￡875,000 andto continue at this level in the future. The profits chargeable to corporation tax of Belgrove Ltd are expected to be￡38,000 for the year ending 31 March 2007 and to increase in the future.On 1 February 2007 Dovedale Ltd will sell a small office building to Hira Ltd for its market value of ￡234,000.Dovedale Ltd purchased the building in March 2005 for ￡210,000. In October 2004 Dovedale Ltd sold a factoryfor ￡277,450 making a capital gain of ￡84,217. A claim was made to roll over the gain on the sale of the factoryagainst the acquisition cost of the office building.On 1 April 2007 Dovedale Ltd intends to acquire the whole of the ordinary share capital of Atapo Inc, an unquotedcompany resident in the country of Morovia. Atapo Inc sells components to Dovedale Ltd as well as to othercompanies in Morovia and around the world.It is estimated that Atapo Inc will make a profit before tax of ￡160,000 in the year ending 31 March 2008 and willpay a dividend to Dovedale Ltd of ￡105,000. It can be assumed that Atapo Inc’s taxable profits are equal to its profitbefore tax. The rate of corporation tax in Morovia is 9%. There is a withholding tax of 3% on dividends paid tonon-Morovian resident shareholders. There is no double tax agreement between the UK and Morovia.Required:(a) Advise Belgrove Ltd of any capital gains that may arise as a result of the sale of the shares in Hira Ltd. Youare not required to calculate any capital gains in this part of the question. (4 marks)
(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.
(ii) Assuming the new structure is implemented with effect from 1 August 2006, calculate the level ofmanagement charge that should be made by Bold plc to Linden Limited for the year ended 31 July2007, so as to minimise the group’s overall corporation tax (CT) liability for that year. (2 marks)
4 (a) For this part, assume today’s date is 1 March 2006.Bill and Ben each own 50% of the ordinary share capital in Flower Limited, an unquoted UK trading companythat makes electronic toys. Flower Limited was incorporated on 1 August 2005 with 1,000 ￡1 ordinary shares,and commenced trading on the same day. The business has been successful, and the company has accumulateda large cash balance of ￡180,000, which is to be used to purchase a new factory. However, Bill and Ben havereceived an offer from a rival company, which they are considering. The offer provides Bill and Ben with twoalternative methods of payment for the purchase of their shares:(i) ￡480,000 for the company, inclusive of the ￡180,000 cash balance.(ii) ￡300,000 for the company assuming the cash available for the factory purchase is extracted prior to sale.Bill and Ben each currently receive a gross salary of ￡3,750 per month from Flower Limited. Part of the offerterms is that Bill and Ben would be retained as employees of the company on the same salary.Neither Bill nor Ben has used any of their capital gains tax annual exemption for the tax year 2005/06.Required:(i) Calculate which of the following means of extracting the ￡180,000 from Flower Limited on 31 March2006 will result in the highest after tax cash amount for Bill and Ben:(1) payment of a dividend, or(2) payment of a salary bonus.You are not required to consider the corporation tax (CT) implications for Flower Limited in youranswer. (5 marks)
(ii) Calculate the corporation tax (CT) payable by Tay Limited for the year ended 31 March 2006, takingadvantage of all available reliefs. (3 marks)
(ii) Analyse the effect of delaying the sale of the business of the Stiletto Partnership to Razor Ltd until30 April 2007 on Clint’s income tax and national insurance position.You are not required to prepare detailed calculations of his income tax or national insurance liabilities.(4 marks)
5 (a) Carver Ltd was incorporated and began trading in August 2002. It is a close company with no associatedcompanies. It has always prepared accounts to 31 December and will continue to do so in the future.It has been decided that Carver Ltd will sell its business as a going concern to Blade Ltd, an unconnectedcompany, on 31 July 2007. Its premises and goodwill will be sold for ￡2,135,000 and ￡290,000 respectivelyand its machinery and equipment for ￡187,000. The premises, which do not constitute an industrial building,were acquired on 1 August 2002 for ￡1,808,000 and the goodwill has been generated internally by thecompany. The machinery and equipment cost ￡294,000; no one item will be sold for more than its original cost.The tax adjusted trading profit of Carver Ltd in 2007, before taking account of both capital allowances and thesale of the business assets, is expected to be ￡81,000. The balance on the plant and machinery pool for thepurposes of capital allowances as at 31 December 2006 was ￡231,500. Machinery costing ￡38,000 waspurchased on 1 March 2007. Carver Ltd is classified as a small company for the purposes of capital allowances.On 1 August 2007, the proceeds from the sale of the business will be invested in either an office building or aportfolio of UK quoted company shares, as follows:Office buildingThe office building would be acquired for ￡3,100,000; the vendor is not registered for value added tax (VAT).Carver Ltd would borrow the additional funds required from a UK bank. The building is let to a number ofcommercial tenants who are not connected with Carver Ltd and will pay rent, in total, of ￡54,000 per calendarquarter, in advance, commencing on 1 August 2007. The company’s expenditure for the period from 1 August2007 to 31 December 2007 is expected to be:￡Loan interest payable to UK bank 16,000Building maintenance costs 7,500Share portfolioShares would be purchased for the amount of the proceeds from the sale of the business with no need for furtherloan finance. It is estimated that the share portfolio would generate dividends of ￡36,000 and capital gains, afterindexation allowance, of ￡10,000 in the period from 1 August 2007 to 31 December 2007.All figures are stated exclusive of value added tax (VAT).Required:(i) Taking account of the proposed sale of the business on 31 July 2007, state with reasons the date(s) onwhich Carver Ltd must submit its corporation tax return(s) for the year ending 31 December 2007.(2 marks)
(c) Calculate and explain the amount of income tax relief that Gerard will obtain in respect of the pensioncontributions he proposes to make in the tax year 2007/08 and contrast this with how his position could beimproved by delaying some of the contributions that he could have made in 2007/08 until 2008/09. Youshould include relevant supporting calculations and quantify the additional tax savings arising as a result ofyour advice.You should ignore the proposed changes to the bonus scheme for this part of this question and assume thatGerard’s income will not change in 2008/09. (12 marks)
(c) Explanatory notes, together with relevant supporting calculations, in connection with the loan. (8 marks)Additional marks will be awarded for the appropriateness of the format and presentation of the schedules, theeffectiveness with which the information is communicated and the extent to which the schedules are structured ina logical manner. (3 marks)Notes: – you should assume that the tax rates and allowances for the tax year 2006/07 and for the financial yearto 31 March 2007 apply throughout the question.– you should ignore value added tax (VAT).
3 Palm plc recently acquired 100% of the ordinary share capital of Nikau Ltd from Facet Ltd. Palm plc intends to useNikau Ltd to develop a new product range, under the name ‘Project Sabal’. Nikau Ltd owns shares in a non-UKresident company, Date Inc.The following information has been extracted from client files and from a meeting with the Finance Director of Palmplc.Palm plc:– Has more than 40 wholly owned subsidiaries such that all group companies pay corporation tax at 30%.– All group companies prepare accounts to 31 March.– Acquired Nikau Ltd on 1 November 2007 from Facet Ltd, an unrelated company.Nikau Ltd:– UK resident company that manufactures domestic electronic appliances for sale in the European Union (EU).– Large enterprise for the purposes of the enhanced relief available for research and development expenditure.– Trading losses brought forward as at 1 April 2007 of ￡195,700.– Budgeted taxable trading profit of ￡360,000 for the year ending 31 March 2008 before taking account of ‘ProjectSabal’.– Dividend income of ￡38,200 will be received in the year ending 31 March 2008 in respect of the shares in DateInc.‘Project Sabal’:– Development of a range of electronic appliances, for sale in North America.– Project Sabal will represent a significant advance in the technology of domestic appliances.– Nikau Ltd will spend ￡70,000 on staffing costs and consumables researching and developing the necessarytechnology between now and 31 March 2008. Further costs will be incurred in the following year.– Sales to North America will commence in 2009 and are expected to generate significant profits from that year.Shares in Date Inc:– Nikau Ltd owns 35% of the ordinary share capital of Date Inc.– The shares were purchased from Facet Ltd on 1 June 2003 for their market value of ￡338,000.– The sale was a no gain, no loss transfer for the purposes of corporation tax.– Facet Ltd purchased the shares in Date Inc on 1 March 1994 for ￡137,000.Date Inc:– A controlled foreign company resident in the country of Palladia.– Annual chargeable profits arising out of property investment activities are approximately ￡120,000, of whichapproximately ￡115,000 is distributed to its shareholders each year.The tax system in Palladia:– No taxes on income or capital profits.– 4% withholding tax on dividends paid to shareholders resident outside Palladia.Required:(a) Prepare detailed explanatory notes, including relevant supporting calculations, on the effect of the followingissues on the amount of corporation tax payable by Nikau Ltd for the year ending 31 March 2008.(i) The costs of developing ‘Project Sabal’ and the significant commercial changes to the company’sactivities arising out of its implementation. (8 marks)
(b) Explain why making sales of Sabals in North America will have no effect on Nikau Ltd’s ability to recover itsinput tax. (3 marks)Notes: – you should assume that the corporation tax rates and allowances for the financial year to 31 March 2007will continue to apply for the foreseeable future.– you should ignore indexation allowance.
(ii) Explain how the inclusion of rental income in Coral’s UK income tax computation could affect theincome tax due on her dividend income. (2 marks)You are not required to prepare calculations for part (b) of this question.Note: you should assume that the tax rates and allowances for the tax year 2006/07 and for the financial year to31 March 2007 will continue to apply for the foreseeable future.
(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.
(b) Calculate the amount of input tax that will be recovered by Vostok Ltd in respect of the new premises in theyear ending 31 March 2009 and explain, using illustrative calculations, how any additional recoverable inputtax will be calculated in future years. (5 marks)
(ii) Write a letter to Donald advising him on the most tax efficient manner in which he can relieve the lossincurred in the year to 31 March 2007. Your letter should briefly outline the types of loss relief availableand explain their relative merits in Donald’s situation. Assume that Donald will have no source of incomeother than the business in the year of assessment 2006/07 and that any income he earned on a parttimebasis while at university was always less than his annual personal allowance. (9 marks)Assume that the corporation tax rates and allowances for the financial year 2004 and the income tax ratesand allowances for 2004/05 apply throughout this question.Relevant retail price index figures are:January 1998 159·5April 1998 162·6
3 The Stiletto Partnership consisted of three partners, Clint, Ben and Amy, who shared the profits of the businessequally. On 28 February 2007 the partners sold the business to Razor Ltd, in exchange for shares in Razor Ltd, witheach former partner owning one third of the new company.The recent, tax adjusted, trading profits of the Stiletto Partnership have been as follows:￡Year ended 30 June 2006 92,1241 July 2006 to 28 February 2007 81,795Clint, who was 65 on 5 October 2006, retired when the business was sold to Razor Ltd. He is now suggesting thatif the sale of the partnership, and his retirement, had been delayed until 30 April 2007, his total tax liability wouldhave been reduced. Clint’s only other income is gross pension income of ￡6,100 per year, which he began receivingin the tax year 2005/06. Clint did not receive any salary or dividends from Razor Ltd. It is estimated that thepartnership’s tax adjusted trading profits for the period from 1 March 2007 to 30 April 2007 would have been￡20,760. Clint has overlap profits of ￡14,250 brought forward from when the partnership began trading.Razor Ltd manufactures industrial cutting tools. On 1 July 2007, Razor Ltd will subscribe for the whole of the ordinaryshare capital of Cutlass Inc, a company newly incorporated in the country of Sharpenia. It is intended that CutlassInc will purchase partly finished tools from Razor Ltd and customise them in Sharpenia. It is anticipated that CutlassInc’s annual profits chargeable to corporation tax will be approximately ￡120,000.Ben and Amy will be the directors of Cutlass Inc, although Ben will not be involved in the company’s business on aday-to-day basis. Amy intends to spend one or two weeks each month in the country of Sharpenia looking after thecompany’s affairs. The remainder of her time will be spent in the UK. Amy has employment contracts with both RazorLtd and Cutlass Inc and her duties for Cutlass Inc will be carried out wholly in Sharpenia. Cutlass Inc will pay forAmy’s flights to and from Sharpenia and for her husband and baby to visit her there twice a year. Amy is currentlyUK resident and ordinarily resident.The system of income tax and corporation tax in the country of Sharpenia is broadly similar to that in the UK althoughthe rate of corporation tax is 38% regardless of the level of profits. There is a double tax treaty between the UK andSharpenia based on the OECD model treaty. The clause in the treaty dealing with company residency states that acompany resident in both countries under domestic law will be regarded under the treaty as being resident only in thecountry where it is effectively managed and controlled. Sharpenia is not a member of the European Union.Required:(a) (i) Calculate Clint’s taxable trading profits for the tax years 2006/07 and 2007/08 for both of thealternative retirement dates (28 February 2007 and 30 April 2007). (3 marks)
You work as a network exchange administrator at company.com.the company.com network currently consists of a single active directory forest containing a single domain named company.com.the company.com organization makes use of microsoft exchange server 2010 as their messaging solution.company.com has recently added a distribution group named king distribute.during the course of the business week you receive instruction from company.com to ensure that a user named rory allen is able to view and approve the messages sent to king distribute whilst also making sure that rory allen cannot make any changes to the membership of king distribute.what should you do？（）A、you should consider having the message tracking management role assigned to rory allen.B、you should consider having rory allen added to the king distribute distribution list and create a new journal rule.C、you should consider having rory allen added to the king distribute distribution group’s managed by list.D、you should consider having rory allen assigned as a group moderator for the king distribute distribution group.
You work as a network Exchange administrator at Company.com.The Company.com network currently consists of a single Active Directory forest containing a single site named KingSite1.The Company.com organization makes use of Microsoft Exchange Server 2010 as their messaging solution.Company.com has recently configured the mailbox server as members of a database availability group （DAG） with a public folder database. During the course of the business week you receive instruction from Company.com to create a new Active Directory site and install Exchange server in the site whilst ensuring the public folders are stored on servers in both sites. What should you do？（）A、You should consider having clustered continuous replication （CCR） configured on two servers in the new site.You should then have the replication settings for all public folder databases modified.B、You should consider having the standby continuous replication （SCR） configured on a server in the new site.You should then have the Enable-StorageGroupCopy cmdlet run from a server in the new site.C、You should consider having a public folder database created on a server in the new site.You should then have the replication settings for all public folders modified.D、You should consider having a public folder database created on a server in the new site.You should then have the set-DatabaseAvailabilityGroup cmdlet run from a server in the new site.
You work as a network Exchange administrator at Company.com.The Company.com network currently consists of a single Active Directory forest containing a single domain named Company.com.The Company.com organization makes use of Microsoft Exchange Server 2010 as their messaging solution.During the course of the business week you receive instruction from Company.com to prevent the network user named Rory Allen from downloading attachments which are larger than 50 KB when making use of Exchange ActiveSync whilst ensuring your solution affects no other users. What should you do？（）A、You should consider having the properties of Rory Allen’s mailbox modified.B、You should consider having the properties if the default Exchange ActiveSync Mailbox policy modified.C、You should consider having a new ActiveSynce Device Access rule created.D、You should consider having a new Exchange ActiveSync Mailbox policy created.
单选题You work as a network Exchange administrator at Company.com.The Company.com network currently consists of a single Active Directory forest containing a single site named KingSite1.The Company.com organization makes use of Microsoft Exchange Server 2010 as their messaging solution.Company.com has recently configured the mailbox server as members of a database availability group （DAG） with a public folder database. During the course of the business week you receive instruction from Company.com to create a new Active Directory site and install Exchange server in the site whilst ensuring the public folders are stored on servers in both sites. What should you do？（）AYou should consider having clustered continuous replication （CCR） configured on two servers in the new site.You should then have the replication settings for all public folder databases modified.BYou should consider having the standby continuous replication （SCR） configured on a server in the new site.You should then have the Enable-StorageGroupCopy cmdlet run from a server in the new site.CYou should consider having a public folder database created on a server in the new site.You should then have the replication settings for all public folders modified.DYou should consider having a public folder database created on a server in the new site.You should then have the set-DatabaseAvailabilityGroup cmdlet run from a server in the new site.