March 9, 2017 at 8:30 am
opentuition_teamKeymasterMarch 9, 2017 at 4:37 pm
Question 1 was very trickyMarch 9, 2017 at 5:02 pm
I found it tricky as well, Even though an easy degrouping charge!March 9, 2017 at 5:11 pm
I didn’t like Q1 either! Struggled to make enough points for Diamond Ltd. The rest of the exam wasn’t too difficult for me.March 9, 2017 at 5:48 pm
Fair paper if know your stuff.
Did not like question 1, just didn’t get the first part for the 19 marks, just went blank.
Thought q2,4 and 5 could answer and have a good go at them. Q1 dragging me down though.March 9, 2017 at 5:54 pm
Q4 part c which option was the best for loss relief?March 9, 2017 at 6:41 pm
Q1 was indeed tricky but was doable. 15 marks unattempted :/, overran on q1. Upset ! I think Q2 was the best of the lot, which could make up for the losses in other questions. Not impossible to pass, but I could scrape through if a decent attempt was made at other questions. Examiner! Plz be kind.March 9, 2017 at 7:19 pm
I did questions in the following order: q5, q3, q2 and q1. Q1 part a did not even attempt it because overran on time at question 5, but I think should have scored enough to pass. Fingers crossed and good luck to everybody.March 9, 2017 at 7:49 pm
Question 1 a was quite strange because the company was leaving the group in 2017 when the asset was acquired in 2010. Now, if I’m not mistaken, a degrouping charge will only arise if the company leaves the group, along with the asset, within 6 years of acquiring at nil gain nil loss? Under both strategies, the transactions took place outside the 6 year window, leaving the base cost as the original cost?
Am I missing something? Did anyone get something similar or different? This was the only tricky part of the paper, the rest was ok, esp 9 marks for ethics in question 2!March 9, 2017 at 8:31 pm
Is true no de grouping charge as passed more than 6 yrs , that’s what I saidMarch 9, 2017 at 8:38 pm
Yeah I said the same. No degrouping charge, hope its right.March 9, 2017 at 8:57 pm
Me to that is what I thought and I did put that for the first option. However, the fact that it was asked really rattled me and I spent a great deal of time going back over the question to see if I had read it right. In the end I applied the degrouping charge (albeit incorrect) to the second choice sighting that a sale in …. when was it? June? was less than six tax years (panic had set in at this stage) Q1 had really knocked the wind out of my sails but I did stick to time. Even so it took me the best part of half the exam time to settle back into the paper which I did finish even though my energy levels had been depleted somewhat by Q1
This is my final paper and my third attempt, missing by 1 mark and 2 marks respectively and its just struck me, it always seems to be q1 part a that has rattled me (Decembers Q1 was equally confusing) Maybe this is an attempt by the examiner by writing Q1 to test students on their time management . Going forward – worse case scenario I will answering the questions in a different order I know if I had taken this strategy today I would be much more confident about the outcome come April 17th.
Good luck everyone.March 9, 2017 at 9:23 pm
I also thought thought no charge on either disposal as both greater than 6 years! Let’s pray it was a red herring as a few easy marks there to notice no de grouping charge on either, really threw me too! Q2 was very do ableMarch 9, 2017 at 9:27 pm
I couldn’t get my head round strategy A or B I just got myself into a real stateMarch 9, 2017 at 10:02 pm
can someone actually tell me what was happening in q1 option B?
1. how to deal with the fact that the asset is within the company when they are taken over? is is different than when is sold before sale?
2. What was going on with the increase in shares?? was this something to do with share premium??? I am soooo confused.
I think q3 was a bit tricky as well but doable.
thanks and good luck for all!March 10, 2017 at 4:08 am
De grouping was on L TD group because they were selling diamond limited or there is possibility that they apply SSE but our client was H LTd group i don’t think so de grouping charge is affecting usMarch 10, 2017 at 6:52 am
Guys how did you do on the 15 months accounting period change I said needs to be split in 3 and 12 months as the CAP can’t be more than 12 months is that right ?
Also on the close co on the Loan to Tim how many shares you got that he should sell back ? I got around 814 and treated as capital income not dividends income
It was so confusing, each Q had opinions !!!!
Best of luckMarch 10, 2017 at 7:47 am
Also in trade was changing and i think we can’t claim rollover relief on building because building was no more business asset after tradeMarch 10, 2017 at 8:37 am
Yes, I also said that for CT period cannot exceed 12 months, therefore split the 15 m period into 2 CT’s as follows: 1st 12 months (due 9 months 1 day after the end of it), 2nd period of 3 months (also due 9 m and 1 day after the end). Also mentioned that if the company is large it must pay CT by quarterly installments, but the scenario mentioned that the company was never large before so it means this year it won’t pay by quortarly even if it is large for the first year, which I think wasn’t the case anyway.March 10, 2017 at 11:31 am
Q1 was hard, but wasn’t as hard as in the past. Mentioned there wasn’t a degrouping charge in either option (as sold the company after 6 years).
i also said that even if there was a degrouping charge, it will probably be covered by the SSE as a trading comp selling shares in a trading comp who owned the shares for 12 months out of 24 months – so should be covered.
Said the loss couldn’t be relieved by the group as it was a pre entry loss and there was a MCINOCOT there (the group wanted to change the business dramticaly)
Worked out some form of rollover relief and option a came out slightly better. But the strategy a and b were tricky and hard to understand exactly I thought.
Said that pearl would be classed as a resident uk company from now on, because although they were incorporated abroad, their financial managers were moving to the uk, and the uk would now be the place of strategic decision making etc.
Said that they should consider exmepting the profits of an over seas branch IF they pay a low corp tax % AND they are profitable – which was the case (otherwise double tax relief would have been capped at 12%, rather than the 20% of the UK)
Q2 where they showed you the death estate computation was quite nice – she needed to add back in personal items and the chatels in the house, the NRB of £325k was too high, needed to reduce it due to GCT’s in the previous 7 years, I said the shares in the company would have qualified for BPR relief so they would be exempt etc.
Then I told her to sell the necklace and the painting as there would be no CGT on them (one was exempt anyway as cost and proceeds under £6k)
Then said if she was prepared to pay a few hundred pound, she could sell the land and use her loss against the gain of the land and for the sake of a small amount she would have another £20k of proceeds from the land (or what ever the land was worth, can’t remember)
Q4 – wasn’t too bad, got a bit stuck further on in the question, but basically said the husband should gift the land to his wife so that she could then sell the land, for the same gain, and then she could use her trading loss against the capital gain, as she had no income that year.
Or she could roll back and use against last year, but that’s her options as she wasn’t ceasing to trade etc.
Q5 – had about 10 mins on this as massively overran elsewhere – mentioned badges of trade, did some rough, crude calculation of the cost of the employee, which I think is probably wrong, said the employer would be cheaper to employ as she can deduct it from her profits and then pay less corp tax on it etc.March 10, 2017 at 11:43 am
In question 2 he was selling land on last day of 2017 say if he alter sale than AEA was available of 17/18March 10, 2017 at 1:18 pm
In Q5 The person had an unincorporated business, therefore no CT saving but saving on IT and NIC as a result of paying to a part employed or self-employed worker.March 10, 2017 at 2:11 pm
Yea tax saving was 42%income tax + class 4 NICMarch 10, 2017 at 2:30 pm
In q5 I worked out that it was better to pay to the self-employed person instead of part time emploee. Has anyone got the same?March 10, 2017 at 3:03 pm
I came to the same conclusion 🙂
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