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Think I failed. The question on the property his father lived in through me as well as the share buy back and the eis scheme. The first question was ok but would have been nice to know how the 20 marks was made up! And it got a bit messy. Question 2 was my favouriate. First p paper though so using it as a learning experience as got my timings wrong as well
Hi Sophie,
The share buy back was in regards to the distribution method I believe.
How did you answer q1 part a and b?
1B I really struggled with and moved on, part A i started and made some working and then got lost as to where the answer was going.
I will be retaking too, my first professional paper and my first fail 🙁
regards
Joe@sophiemuzz said:
Think I failed. The question on the property his father lived in through me as well as the share buy back and the eis scheme. The first question was ok but would have been nice to know how the 20 marks was made up! And it got a bit messy. Question 2 was my favouriate. First p paper though so using it as a learning experience as got my timings wrong as wellWith part 1a the loss for first year I calculated couldn’t be carried back as pro rata it wasn’t a loss but thinking back hopefully that wasn’t a miscalculation (probably was) I can’t even think of what the second part of the question was. The rest I think I calculated that part A was the most profitable over all
Part B was in regards to the Inheritance received which was from either the dad’s death estate or the mum
I’m gutted I studied so hard for this paper, and I screwed it up.
Q1 was terrible?
So was q2, I did q3 and q4 but can’t remember much about them.
Does any one remember the questions and answers they gave plus the marks that were available?
I think I decided it was from his aunty.
Did I ready aunty wrong and it was mum?
Yeah I think it was the Aunty received inheritance from her dad? And as was in the 7 years was entitled to the quick succession relief if it was from the fathers estate
For question 1b I’m still unsure what they was even asking us to do for the question. Not sure thought it said mum but don’t think that matters.
Felt like walking out after my time for question 1 was over, literally did nothing of value. Didn’t have time to look at it further, 35 marks down the drain.
@mynameisearl said:
I think I decided it was from his aunty.Did I ready aunty wrong and it was mum?
For the 1b inheritance I think what the question was suggesting is that quick succession relief would apply if it came from the grandad’s estate because otherwise the 75k would be taxed twice within 5 years
However I had to read it about 5 times and still couldn’t work out how we were meant to know what estate it was from so I just said if he doesn’t know then tough, he won’t get QSR but he’ll pay 40% death tax – 4-5 year taper relief for his auntie’s death
It was awful, I think a definite fail for me.
I did not understand why the brother wasn’t making an election about buying the shares.
Were they trying to tell us something.
I got that it was a distribution but could not remember how to work out the cost for the distribution, think it was a different cost for selling to the brother.
I spent so long on the numbers for question 1 that did not have time to write more than half a page and that was for 20 marks.
The IHT for the Grandad or Esme I just said we need to investigate who it was from and gave the IHT consequences on both situation, taper, annual allowance, etc.etc
I did get there was a loss still in 1 strategy B – but do not feel at all confident on those numbers.
Also I got that the guy had to sell his house at market value in April for the cost after his dad finished living in it but got so confused what else to do so I compared it to PPR on the sale proceeds less original cost.
I was ok with the writing side of it but the numbers completely though me – what were we supposed to do with the IHT on the house abroad I just deducted it from the IHT due but I think I should have done lower of UK IHT and Overseas IHT on the property.
Overall a complete nightmare on the numbers side as less common number situations came up from the past question I did.
What did everyone do for question 1 a – I did not realise there was an option of there not being a loss?I got the first year was a loss but for opening year loss as the first period wasn’t 12 months, once I add the extra months on to make it 12 months it stopped it from being a loss for the carry back claim against the three previous years
With the EIS part, he earned the 30% IT reducer then subsequently sold inside the 3 year window. Therefore he would have lost the benefit.
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For 1a (what a nightmare!), I deducted the capital losses from the trading profit shown on the left of the page. Strategy A didn’t create a loss in either year, however in the first year of strategy B, I got a loss of £18,000, which I deducted against the first year of his employment income (Fifo basis) and stated that as he will have paid higher rate tax, he would be due a refund at 40%.
The rest of that part, I worked out the salaries of the two employees + the NIC’s due as a result and deducted them from the “pre cash profits” not to be questioned. Then worked out his personal sarary and NIC, before arriving at his shortfall.I must admit that I you that question totally bizarre and am curious how the figures left of the page tied in with the proforma on the right. Fingers crossed :-/ anyone else do anything similar on that?
Question 2 almost seemed a little too simple for me. I’m concerned at how straight forward it seemed lol
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Studied so much and I am so disappointed, can’t be sure of a pass . Really so much time pressured….. no time even to think what I wanna write ….
Does he lose the benefit completel? I apportioned the defer from the earlier sale.but just guessed that.
I did the exact same up to the FIFO basis and then just completely lost how page 1 connected with page 2 so didn’t know what to do
i was spending way too long reading this question and working out how to get to that part and then panicked and completely left part B and C. I then moved on to the next question with the hope of coming back and then never had time!
I can’t believe how short for time you are it’s more a case of getting everything you know down quickly instead of actually professionally calculating and writing a memorandum
If you don’t write an answer, but produce the memorandum cover note do you think you’d get any professional marks haha?
@ccoda said:
For 1a (what a nightmare!), I deducted the capital losses from the trading profit shown on the left of the page. Strategy A didn’t create a loss in either year, however in the first year of strategy B, I got a loss of £18,000, which I deducted against the first year of his employment income (Fifo basis) and stated that as he will have paid higher rate tax, he would be due a refund at 40%.
The rest of that part, I worked out the salaries of the two employees + the NIC’s due as a result and deducted them from the “pre cash profits” not to be questioned. Then worked out his personal sarary and NIC, before arriving at his shortfall.I must admit that I you that question totally bizarre and am curious how the figures left of the page tied in with the proforma on the right. Fingers crossed :-/ anyone else do anything similar on that?
Question 2 almost seemed a little too simple for me. I’m concerned at how straight forward it seemed lol
Same here, put way too much time into this exam and feel like i’ve messed up by not actually knowing what they want in question 1, instead of my knowledge in the module
@cristinadubai said:
Studied so much and I am so disappointed, can’t be sure of a pass . Really so much time pressured….. no time even to think what I wanna write ….By going with the brother for the shares she was able to be taxed at capital gain, meaning she could be taxed at ER relief instead of at dividend … i think
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Question 1 was quite confusing. 1a was about Pippin starting a new business on 1 aug 17 n profit/loss figures were provided for period ending 31 mar 18 n yr ending 31 mar 19 under 2 different strategies A n B. Strategy B included employing 2 persons as from 1 Apr 18 n they were provided salary n mileage benefit. Among question requirements was to calculate additional funds required by Pippin to cater amongst others for income taxes/nic n personal expenditure under each strategy A n B for tax yrs 17/18 and 18/19 n evaluate the strategies. Question was messy n lost much time in trying to understand question requirements :/
1b was about the receipt of £75,000 cash as to whether was from Esme (Pippin’s aunt) who i think died on 31 January 2017 or whether from his grandfathers estate who died in 2011. It was mentioned i think that pippin received the cash on 1 Jan 2012 n also that the grandfather left the whole of estate to Esme. Does anyone remember this? IHt implications of same was required.
1c was abt EIS defferal relief n sale of shares.
Question 2 was abt Group planning – capital gains group implications, who were members of the group, offset of losses to meet group’s objectives, relevance of specific information provided.
Group structuring – transfer of assets of certain subsidiaries to L ltd
Pink ltd VAT registration n implications – zero rated ss to public
Disclosure and non disclosure implications to tax advisers n group management with respect to understatement in VAT returns.
Very tough exam.
Q1 I calculated extra employer NI and class 1A on the extra 5p per mile as only 45p allowed. Anything similar?
Then went on to take the 8000 machinery off as covered by AIA. Then calculated the taxable profits for each year. Then went on to calculate the tax and NI for Pippin. Dividend income was covered by the first 5000 rule so no tax. Then provided a summary at the end as sure there would be marks for doing this even if figures were wrong. Anyone follow similar process?
Some parts of the questions were tough. I said that for the shares she could use the capital method so this was the best approach. Sure she covered all the criteria. If benefits trade, sells certain % etc. Again may be wrong.
EIS relief effectively became void.
Vat 83000 limit criteria was in there. 35k a month revenue would have breached.
Anyone relate to any of this? Ha
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I think my comment above relates to what you have done for q1 pretty much.
With regard to the sis being void, I stated that if sold prior to January 18 (I believe) that IT would become void, if after, it would be exempt.
I believe the question stated “what would happen if he sold them in 17/18, which happened to be the year that they would fall under the 3 year rule from memory
Did you get a loss in part 1 too? as it was for the basis period to the 31st March?
The rest I did the same as you ?
And there was a shortfall each year but strategy A better as less shortfall. Did not have a clue really was completely thrown by the question.
I said the relief was partially withdrawn – just a guess – for the EIS as less than three years but not all shares sold.
I said she should sell to her brother as better after tax proceeds ar ER on that one but again no clue.
So different from the practise and revision kit.
Dreading having to try and remember all that stuff again for September.
I can’t remember it saying what if he sold them in 17/18 but I did say he should wait if he can till the three year date.What about question two what did you put ?
I also clocked the 5p per mile BIK
However hate to tell you but the VAT supplies were 100% zero rated. If you’re not making taxable supplies, there’s no obligation to register. Only a couple of marks though, I’m noticing where I’ve dropped loads reading people’s comments
@david1988 said:
Very tough exam.Q1 I calculated extra employer NI and class 1A on the extra 5p per mile as only 45p allowed. Anything similar?
Then went on to take the 8000 machinery off as covered by AIA. Then calculated the taxable profits for each year. Then went on to calculate the tax and NI for Pippin. Dividend income was covered by the first 5000 rule so no tax. Then provided a summary at the end as sure there would be marks for doing this even if figures were wrong. Anyone follow similar process?
Some parts of the questions were tough. I said that for the shares she could use the capital method so this was the best approach. Sure she covered all the criteria. If benefits trade, sells certain % etc. Again may be wrong.
EIS relief effectively became void.
Vat 83000 limit criteria was in there. 35k a month revenue would have breached.
Anyone relate to any of this? Ha
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