(b) Donald actually decided to operate as a sole trader. The first year’s results of his business were not as he hadhoped, and he made a trading loss of ￡8,000 in the year to 31 March 2007. However, trading is now improving,and Donald has sufficient orders to ensure that the business will make profits of at least ￡30,000 in the year to31 March 2008.In order to raise funds to support his business over the last 15 months, Donald has sold a painting which wasgiven to him on the death of his grandmother in January 1998. The probate value of the painting was ￡3,200,and Donald sold it for ￡8,084 (after deduction of 6% commission costs) in November 2006.He also sold other assets in the year of assessment 2006/07, realising further chargeable gains of ￡8,775 (afterindexation of ￡249 and taper relief of ￡975).Required:(i) Calculate the chargeable gain on the disposal of the painting in November 2006. (4 marks)
(b) Donald actually decided to operate as a sole trader. The first year’s results of his business were not as he had
hoped, and he made a trading loss of ￡8,000 in the year to 31 March 2007. However, trading is now improving,
and Donald has sufficient orders to ensure that the business will make profits of at least ￡30,000 in the year to
31 March 2008.
In order to raise funds to support his business over the last 15 months, Donald has sold a painting which was
given to him on the death of his grandmother in January 1998. The probate value of the painting was ￡3,200,
and Donald sold it for ￡8,084 (after deduction of 6% commission costs) in November 2006.
He also sold other assets in the year of assessment 2006/07, realising further chargeable gains of ￡8,775 (after
indexation of ￡249 and taper relief of ￡975).
Required:
(i) Calculate the chargeable gain on the disposal of the painting in November 2006. (4 marks)
相关考题：
(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)
4 Assume today’s date is 5 February 2006.Joanne is 37, she was born and until 2005 had lived all her life in Germany. She recently married Fraser, aged 38,who is a UK resident, but who worked briefly in Germany. They have no children.The couple moved to the UK to live permanently on 9 October 2005. Joanne was employed by an American companyin Germany, and she continued to work for them in the UK until the end of November 2005. Her earnings from theAmerican company were ￡5,000 per month. Joanne has not remitted any of the income she earned in Germany priorto her arrival in the UK.Joanne resigned from her job at the end of November 2005. The company did not hold her to the three months noticestipulated in her contract, but still paid her for that period. In total, Joanne paid ￡4,200 in UK income tax under PAYEfor the tax tear 2005/06.Joanne also wishes to sell the shares she holds in a German listed company. The shareholding cost the equivalent of￡3,500 in September 1986, and its current value is ￡21,500. She intends to sell the shares in March 2006 and toinvest the proceeds from the sale in the UK. Joanne has made no other capital disposals in the year.Prior to her leaving employment, Joanne investigated the possibility of starting her own business providing a Germantranslation service for UK companies, and took some advice on the matter. She paid consultancy fees of ￡5,000(excluding value added tax (VAT)) and bought a computer for ￡2,000 (excluding VAT), both on 23 October 2005.Joanne started trading on 1 December 2005. She made sales of ￡2,000 in December, and estimates that her saleswill rise by ￡1,000 every month to a maximum of ￡7,000 per month. Joanne believes that her monthly expenses of￡400 (excluding VAT) will remain constant. Her year end will be 31 March, and the first accounts will be drawn upto 31 March 2006.Although Joanne has registered her business for tax purposes with the Revenue, she has not registered for VAT andis unsure what is required of her in this respect.Required:(a) State, giving reasons, whether Joanne will be treated as resident or non-resident in the UK for the year ofassessment 2005/06, together with the basis on which her income and gains of that year will be subject toUK taxation. (3 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)
(ii) Assuming that Donald operates through a company, advise Donald on the corporation tax (CT) thatwould be payable for the year ended 31 March 2007 if he pays himself a gross salary of ￡31,000, plusa net dividend of ￡10,000, instead of a gross salary of ￡42,648. (4 marks)
6 Alasdair, aged 42, is single. He is considering investing in property, as he has heard that this represents a goodinvestment. In order to raise the funds to buy the property, he wants to extract cash from his personal company, BeezerLimited, whose year end is 31 December.Beezer Limited was formed on 1 May 1998 with ￡1,000 of capital issued as 1,000 ￡1 ordinary shares, and tradeduntil 1 January 2005 when Alasdair sold the trade and related assets. The company’s only asset is cash of￡120,000. Alasdair wants to extract this cash from the company with the minimum amount of tax payable. He isconsidering either, paying himself a dividend of ￡120,000, on 31 March 2006, after which the company would haveno assets and be wound up or, leaving the cash in the company and then liquidating the company. Costs of liquidationof ￡5,000 would then be incurred.Since Beezer Limited ceased trading, Alasdair has been taken on as a partner at a marketing firm, Gallus Co. Heestimates his profit share for the year of assessment 2005/06 will be ￡30,000. He has not made any capital disposalsin the current tax year.Alasdair wishes to reinvest the cash extracted from Beezer Limited in property but is not sure whether he should investdirectly in residential or commercial property, or do so via some form. of collective investment. He is aware that Gallus Co are looking to rent a new warehouse which could be bought for ￡200,000. Alasdair thinks that he may be ableto buy the warehouse himself and lease it to his firm, but only if he can borrow the additional money to buy theproperty.Alasdair has a 25% shareholding in another company, Glaikit Limited, whose year end is 31 March. The remainingshares in this company are held by his friend, Gill. Alasdair is considering borrowing ￡15,000 from Glaikit Limitedon 1 January 2006. He does not intend to pay any interest on the loan, which is likely to be written off some timein 2007. Alasdair does not have any connection with Glaikit Limited other than his shareholding.Required:(a) Advise Alasdair whether or not a dividend payment will result in a higher after-tax cash sum than theliquidation of Beezer Limited. Assume that either the dividend would be paid on 31 March 2006 or theliquidation would take place on 31 March 2006. (9 marks)Assume that Beezer Limited has always paid corporation tax at or above the small companies rate of 19%and that the tax rates and allowances for 2004/05 apply throughout this part.
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)
4 Assume today’s date is 15 May 2005.In March 1999, Bob was made redundant from his job as a furniture salesman. He decided to travel round the world,and did so, returning to the UK in May 2001. Bob then decided to set up his own business selling furniture. Hestarted trading on 1 October 2001. After some initial success, the business made losses as Bob tried to win morecustomers. However, he was eventually successful, and the business subsequently made profits.The results for Bob’s business were as follows:Period Schedule D Case ITrading Profits/(losses)￡1 October 2001 – 30 April 2002 13,5001 May 2002 – 30 April 2003 (18,000)1 May 2003 – 30 April 2004 28,000Bob required funds to help start his business, so he raised money in three ways:(1) Bob is a keen cricket fan, and in the 1990s, he collected many books on cricket players. To raise money, Bobstarted selling books from his collection. These had risen considerably in value and sold for between ￡150 and￡300 per book. None of the books forms part of a set. Bob created an internet website to advertise the books.Bob has not declared this income, as he believes that the proceeds from selling the books are non-taxable.(2) He disposed of two paintings and an antique silver coffee set at auction on 1 December 2004, realisingchargeable gains totalling ￡23,720.(3) Bob took a part time job in a furniture store on 1 January 2003. His annual salary has remained at ￡12,600per year since he started this employment.Bob has 5,000 shares in Willis Ltd, an unquoted trading company based in the UK. He subscribed for these sharesin August 2000, paying ￡3 per share. On 1 December 2004, Bob received a letter informing him that the companyhad gone into receivership. As a result, his shares were almost worthless. The receivers dealing with the companyestimated that on the liquidation of the company, he would receive no more than 10p per share for his shareholding.He has not yet received any money.Required:(a) Write a letter to Bob advising him on whether or not he is correct in believing that his book sales are nontaxable.Your advice should include reference to the badges of trade and their application to this case.(9 marks)
2 Benny Korere has been employed as the sales director of Golden Tan plc since 1994. He earns an annual salary of￡32,000 and is provided with a petrol-driven company car which has a CO2 emission rate of 187g/km and had alist price when new of ￡22,360. In August 2003, when he was first provided with the car, Benny paid the company￡6,100 towards the capital cost of the car. Golden Tan plc does not pay for any of Benny’s private petrol and he isalso required to pay his employer ￡18 per month as a condition of being able to use the car for private purposes.On 1 December 2006 Golden Tan plc notified Benny that he would be made redundant on 28 February 2007. Onthat day the company will pay him his final month’s salary together with a payment of ￡8,000 in lieu of the threeremaining months of his six-month notice period in accordance with his employment contract. In addition thecompany will pay him ￡17,500 in return for agreeing not to work for any of its competitors for the six-month periodending 31 August 2007.On receiving notification of his redundancy, Benny immediately contacted Joe Egmont, the managing director ofSummer Glow plc, who offered him a senior management position leading the company’s expansion into EasternEurope. Summer Glow plc is one of Golden Tan plc’s competitors and one of the most innovative companies in theindustry, although not all of its strategies have been successful.Benny has agreed to join Summer Glow plc on 1 September 2007 for an annual salary of ￡39,000. On the day hejoins the company, Summer Glow plc will grant him an option to purchase 10,000 ordinary shares in the companyfor ￡2·20 per share under an unapproved share option scheme. Benny can exercise the option once he has beenemployed for six months but must hold the shares for at least a year before he sells them.The new job will require Benny to spend a considerable amount of time in London. Summer Glow plc has offeredBenny the exclusive use of a flat that the company purchased on 1 June 2003 for ￡165,000; the flat is currentlyrented out. The flat will be made available from 1 September 2007. The company will pay all of the utility billsrelating to the flat as well as furnishing and maintaining it. Summer Glow plc has also suggested that if Benny wouldrather live in a more central part of the city, the company could sell the existing flat and buy a more centrally locatedone, of the same value, with the proceeds.On 15 March 2007 Benny intends to sell 5,800 shares in Mahana plc, a quoted company, for ￡24,608. Histransactions in the company’s shares have been as follows:￡June 1988 Purchased 8,400 shares 6,744February 1996 Sale of rights nil paid 610January 2005 Purchased 1,300 shares 2,281The sale of rights, nil paid, was not treated as a part disposal of Benny’s holding in Mahana plc.Benny’s shareholding in Mahana plc represents less than 1% of the company’s issued ordinary share capital. He willnot make any other capital disposals in 2006/07.In addition to his employment income, Benny receives rental income of ￡4,000 (net of deductible expenses) eachyear. He normally submits his tax return in August but he has not yet prepared his return for 2005/06. He expectsto be very busy in December and January and is planning to prepare his tax return in late February 2007.Required:(a) Calculate Benny’s employment income for 2006/07. (4 marks)
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)
(b) Explain by reference to Hira Ltd’s loss position why it may be beneficial for it not to claim any capitalallowances for the year ending 31 March 2007. Support your explanation with relevant calculations.(6 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)
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)
6 Sergio and Gerard each inherited a half interest in a property, ‘Hilltop’, in October 2005. ‘Hilltop’ had a probate valueof ￡124,000, but in November 2005 it was badly damaged by fire. In January 2006 the insurance company madea payment of ￡81,700 each to Sergio and Gerard. In February 2006 Sergio and Gerard each spent ￡55,500 of theinsurance proceeds on restoring the property. ‘Hilltop’ was worth ￡269,000 following the restoration work. In July2006, Sergio and Gerard sold ‘Hilltop’ for ￡310,000.Sergio is 69 years old and a widower with three adult children and seven grandchildren. His annual income consistsof a pension of ￡9,900 and interest of ￡300 on savings of ￡7,600 in a bank deposit account. Sergio owns his homebut no other significant assets. He plans to buy a domestic rental property with the proceeds from the sale of ‘Hilltop’,such that on his death he will have a significant asset which can be sold and divided between the members of hisfamily.Gerard is 34 years old. He is employed by Fizz plc on a salary of ￡66,500 per year together with a performancerelated bonus. Gerard estimates that he will receive a bonus in December 2007 of ￡4,500, in line with previousyears, and that his taxable benefits in the tax year 2007/08 will amount to ￡7,140. He also expects to receivedividends from UK companies of ￡1,935 and bank interest of ￡648 in the tax year 2007/08. Gerard intends to setup a personal pension plan in August 2007. He has not made any pension contributions in the past and proposes touse part of the proceeds from the sale of ‘Hilltop’ to make the maximum possible tax allowable contribution.Fizz plc has announced that it intends to replace the performance related bonus scheme with a share incentive plan,also linked to performance, with effect from 6 April 2008. Gerard estimates that Fizz plc will award him free sharesworth ￡2,100 each year. He will also purchase partnership shares worth ￡700 each year and, as a result, will beawarded matching shares (further free shares) worth ￡1,400.Required:(a) Calculate the chargeable gains arising on the receipt of the insurance proceeds in January 2006 and the saleof ‘Hilltop’ in July 2006. You should assume that any elections necessary to minimise the gain on the receiptof the insurance proceeds have been submitted. (4 marks)
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)
5 Crusoe has contacted you following the death of his father, Noland. Crusoe has inherited the whole of his father’sestate and is seeking advice on his father’s capital gains tax position and the payment of inheritance tax following hisdeath.The following information has been extracted from client files and from telephone conversations with Crusoe.Noland – personal information:– Divorcee whose only other relatives are his sister, Avril, and two grandchildren.– Died suddenly on 1 October 2007 without having made a will.– Under the laws of intestacy, the whole of his estate passes to Crusoe.Noland – income tax and capital gains tax:– Has been a basic rate taxpayer since the tax year 2000/01.– Sales of quoted shares resulted in:– Chargeable gains of ￡7,100 and allowable losses of ￡17,800 in the tax year 2007/08.– Chargeable gains of approximately ￡14,000 each tax year from 2000/01 to 2006/07.– None of the shares were held for long enough to qualify for taper relief.Noland – gifts made during lifetime:– On 1 December 1999 Noland gave his house to Crusoe.– Crusoe has allowed Noland to continue living in the house and has charged him rent of ￡120 per monthsince 1 December 1999. The market rent for the house would be ￡740 per month.– The house was worth ￡240,000 at the time of the gift and ￡310,000 on 1 October 2007.– On 1 November 2004 Noland transferred quoted shares worth ￡232,000 to a discretionary trust for the benefitof his grandchildren.Noland – probate values of assets held at death: ￡– Portfolio of quoted shares 370,000Shares in Kurb Ltd 38,400Chattels and cash 22,300Domestic liabilities including income tax payable (1,900)– It should be assumed that these values will not change for the foreseeable future.Kurb Ltd:– Unquoted trading company– Noland purchased the shares on 1 December 2005.Crusoe:– Long-standing personal tax client of your firm.– Married with two young children.– Successful investment banker with very high net worth.– Intends to gift the portfolio of quoted shares inherited from Noland to his aunt, Avril, who has very little personalwealth.Required:(a) Prepare explanatory notes together with relevant supporting calculations in order to quantify the tax reliefpotentially available in respect of Noland’s capital losses realised in 2007/08. (4 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
6 Charles and Jane Miro, aged 31 and 34 years respectively, have been married for ten years and have two childrenaged six and eight years. Charles is a teacher but for the last five years he has stayed at home to look after theirchildren. Jane works as a translator for Speak Write Ltd.Speak Write Ltd was formed and began trading on 6 April 2006. It provides translation services to universities. Jane,who ceased employment with Barnham University to found the company, owns 100% of its ordinary share capitaland is its only employee.Speak Write Ltd has translated documents for four different universities since it began trading. Its biggest client isBarnham University which represents 70% of the company’s gross income. It is estimated that the company’s grossfee income for its first 12 months of trading will be ￡110,000. Speak Write Ltd usually agrees fixed fees in advancewith its clients although it charges for some projects by reference to the number of days taken to do the work. Noneof the universities makes any payment to Speak Write Ltd in respect of Jane being on holiday or sick.All of the universities insist that Jane does the work herself. Jane carries out the work for three of the universities inher office at home using a computer and specialised software owned by Speak Write Ltd. The work she does forBarnham University is done in the university’s library on one of its computers as the documents concerned are toodelicate to move.The first set of accounts for Speak Write Ltd will be drawn up for the year ending 5 April 2007. It is estimated thatthe company’s tax adjusted trading profit for this period will be ￡52,500. This figure is after deducting Jane’s salaryof ￡4,000 per month and the related national insurance contributions but before any adjustments required by theapplication of the personal service companies (IR 35) legislation. The company has no other sources of income orcapital gains.Jane has not entered into any communication with HM Revenue and Customs (HMRC) with respect to the companyand wants to know:– When the corporation tax computation should be submitted and when the tax is due.– When the corporation tax computation can be regarded as having been agreed by HMRC.Charles and Jane have requested a meeting to discuss the family’s finances. In particular, they wish to consider theshortfall in the family’s annual income and any other related issues if Jane were to die. Their mortgage is coveredby a term assurance policy but neither of them have made any pension contributions or carried out any other longterm financial planning.Jane has estimated that her annual after tax income from Speak Write Ltd, on the assumption that she extracts all ofthe company’s profits, will be ￡58,000. Charles owns two investment properties that together generate after taxincome of ￡8,500. He estimates that he could earn ￡28,000 after tax if he were to return to work.The couple’s annual surplus income, after payment of all household expenditure including mortgage payments of￡900 per month, is ￡21,000. Charles and Jane have no other sources of income.Required:(a) Write a letter to Jane setting out:(i) the arguments that HMRC could put forward, based only on the facts set out above, in support ofapplying the IR 35 legislation to Speak Write Ltd; and(ii) the additional income tax and national insurance contributions that would be payable, together withtheir due date of payment, if HMRC applied the IR 35 legislation to all of the company’s income in2006/07. (11 marks)
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)
A CAR STOPPED JUST IN THE MIDDLE OF THE STREET Joan has been charged with a misdemeanor by asking her 13-year-old son to drive, putting her child in a dangerous situation. It was Joan's 32ndbirthday, so she decided to go out for dinner with her 35-year-old boyfriend, Donald, as well as her 13-year-old son, Mike. Joan was so happy that she drank two bottles of wine with her boyfriend.When it was time to go home, both Joan and Donald were too drunk to drive.They knew it clearly that both of them couldn't drive home safely after that much wine, so they sat in the back seat and asked Mike, Joan's 13-year-old son, to drive the 2008 Land Rover. Being a driver for the first time in his life, Mike could receive no help from his mom or Donald.They were too drunk to tell him clearly what to do. He started the car nervously, but when he realized he couldn't control the car at all, he was scared and depressed. He decided to stop the car and refuse to drive any further. He called the police for help. When the police arrived, they found the car was stopped right in the middle of the street.1. Joan has been charged with driving after drinking.()2. Mike was 35 years old.()3. Joan and Donald were both too drunk to drive.()4. It was the first time for Mike to drive.()5. The police stopped Mike in the middle of the street.()
John Smith is a student in his first year at university, so he is _____. A.freshmanB.sophomoreC.juniorD.senior
By the end of his senior year, he was earning two hundred dollars a week writing science fiction, and his parents were reconciled to his pursuit of the literary life.
共用题干A Success StoryAt 19,Ben Way is already a millionaire,and one of a growing number of teenagers who have ______(51)their fortune through the Internet.______(52)makes Ben's story all the more remarkable is that he is dyslexic,and was______(53)by teachers at his junior school that he would never be able to read or write______(54).“I wanted to prove them______(55)”, says Ben,creator and director of Waysearch,a net search engine which can be used ______(56)find goods in online shopping malls.When he was eight,his local authorities provided him with a PC to help with school work.Although he was______(57)to read the manuals,he had a natural ability with the computer, and______(58)by his father,he soon began______(59)people￡10 an hour for hisknowledge and skills.At the age of 15 he______(60)up his own computer consultancy, Quad Computer,which he ran from his bedroom,and two years later he left school to ______(61)all his time to business.“By this time the company had grown and I needed to take on a______(62)of employees to help me”,says Ben.“That enabled me to start doing business with______(63)companies.”It was his ability to consistently______(64)difficult challenges that led him to win the Young Entrepreneur of the Year award in the same year that he formed Waysearch,and he has re-cently signed a deal______(65)￡25 million with a private investment company,which will finance his search engine.61._________A: payB: spendC: devoteD: invest
Time to Stop Traveling by Air Twenty-five years ago a young British man called Mark Ellingham decided that he wanted a change of scenery. So he went to Australia, stopping off in many countries between. He also decided to write about the experience and produced a guide for other travelers making similar journeys. In 1970, British airports were used by 32million people. In 2004, the figure was 216 million. In 2030, according to government forecasts, it will be around 500 million. It's a growth driven by the emergence of low cost airlines, offering access to all parts of the world for less than ￡100. This has made a huge contribution to global warming. One return flight from Britain to the US produces the same carbon dioxide(二氧化碳)as a year's motoring(驾车). A return flight to Australia equals the emissions(排放)of three average cars for a year. And the pollution is released at a height where its effect on climate change is more than double that on the ground. Mark Ellingham built his business on helping people travel. Now he wants to help people stop – at least by air. He is calling for a ￡100 green tax on all flights to Europe and Africa, and ￡250 on flights to the rest of the world. He also wants investment to create a low-carbon economy, as well as a halt to airport expansion. Mark Ellingham's commitment is important because his readers aren't just the sort of young and adventurous people who would happily jump on a plane to spend a weekend exploring a foreign culture. They are also the sort of people who say they care about the environment. It's a debate that splits people down the middle. The tourist industry has responded by offering offsetting(补偿)schemes. A small increase in the price of a ticket is used to plant trees. But critics say that it is not enough to just be carbon neutral. We should be actively cutting back on putting green house gases into the atmosphere. And for the average person, making a plane journey will be his or her largest contribution to global warming. It maybe good to repair the damage we do. But surely it is better not to do the damage in the first place.文章(1~7)Mark Ellingham spent quite a few days in China on his way to Australia 25 years ago.A.RightB.WrongC.Not mentioned
单选题Having made his first film earlier this year, he is ______ starting in a new musical.AactuallyBrecentlyCcurrentlyDlately
问答题When David is twice as old as he is now he will be four times as old as his daughter Jane will be in five years time. If in 1990, four years ago, he was four times as old as his daughter, in what year was she born?