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Thank you very much John – this now makes sense!

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Thank you John – noted regarding the rates on the tax shield.

In relation to the external financing, how do you get 10+40+150 and what do these figures relate to?

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It was my first time sitting this paper. Found it hard! Can someone please confirm if you get marks if your method is correct but the answer wrong and you make assumptions based on those.

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Thank you for this John – it is very helpful!

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Hi,

I’ve realised my mistake for this.

Thanks!

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Sorry, please ignore. I understand this now.

Thanks

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Perfect, thanks! 🙂

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Than you for your reply. I have the notes from March 2016. However, I have purchased an updated practice and region kit. So just to clarify the actual syllabus hasn’t changed since March 2016 apart from the audit report.

Also which lectures would I need to watch for the format and content of audit reports and the groupings of assertions?

Thanks

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@msarosh said:
I re-read the question many times to make sure i didnt miss the salary so im sure they didnt give it. Didnt we need to know the salary for the next question for POAs?

I’m pretty sure there was a salary and it was split 60/40! We needed the salary for the income tax liability and this led to calculating the POA.

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@sophiemuzz said:
Wasnt the salary for the other partner and she got the remaining 60% for those 5 months? and the prior 7 months were 50/50 split. The property income I deducted the £4250 rent a room allowance

Yeah you’re right Sophie. From what I remember it was split 60% to 40% I forgot about the rent a room allowance as I used the full salary 🙁 seems an awful lot of work for just marks!

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@msarosh said:
Wasnt that the last question? I guess i got them mixed up, sorry.

What was Lunas salary? I dont think they mentioned it in the question? ‘Cause they mentioned she was employed until the day before the partnership started and tax was deducted through the PAYE system but the amount wasnt mentioned

No worries! Was the overall salary £4000? I think the share was 60/40 right? I forgot that part of the question, sorry!

Did you add all of the salary and property income then?

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Oh sorry I thought you meant the last question on the paper! For the income tax liability, I just used the trading profit figure from part a and then added the salary (employment income) and also property income and deducted it from the personal allowance but this was o for me as it was above 121200. The last part I put the dates as 31 Jan and 31 July and the payment was half of the income tax liability in Jan and half in September. Don’t think it was right though.

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The second last question was about advantages of short life assets and the last question was about property income. For the last one you I included all the rent for the relevant year and then accrued the insurance. What did everyone do for the premium?

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@heychi said:
This was another one I confused myself on ha.

I ended up choosing B which i think was that the PET unused, then April and April.

I remember just getting confused in general with PET and CLT. I thought I was pretty solid on IHT so I’m not sure if it was exam pressure.I know CLT uses up the lifetime allowance straight away, but the PET only uses it up if the donor dies within 7 years right? or does it use it up straight away and then WHEN 7 years have passed the limit is increased back again? There was one question to choose between 105,000 and 55,000 of the lifetime allowance available.

I think you ignore PETs when doing lifetime transfers, they only become relevant for inheritance tax payable on death.

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@sophiemuzz said:
For the property business, i treated it as it was a business rather than capital as their business was property development so it should be treated as a trade. I cant remember exactly what legal fees etc I included, but I definitely deducted the capital allowances. from the profit. As it was a partnership as well rather than a company I also only included the business use in the capital allowances deduction – not sure if this is correct though

So you didn’t include the property income in your income tax liability then? That’s fine, no worries!

I did the exact same thing did capital allowances as well. It made sense to use the business use proportion as opposed to the private use and then deduct it. One of the cars qualified for fya and the other was main pool (business use)

Also for the lady question on the paper, property income, did you include the premises, I think it was for £50,000?

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Yeah I see what you mean, so what about the rest of the items?

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Sophie- I didn’t realise the Partnership was time apportioned, I forgot about that! I took the salary all as one (£4000)and then added all the property income. That’s probably wrong I guess. I didn’t deduct any personal allowance as it was greater than 121200. I added the loan which I don’t think was correct.

Heychi – I also did the full capital allowance working snf deduced it from the proceeds and legal fees on sale and purchase etc.

Yeah, it’s like they had all the capital allowances info, legal fees in sale, legal fees on acquisition and also enhancement costs, why would they be in the question if they don’t expect you to use them?!

I agree, it was a lot to do for 6 marks!

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For the trading profit question, were you meant to take the proceeds and then debit the legal fees in sale, purchase and capital allowances but add the loan?

For the income tax part on part b, I added the salary and property income as this is part of the income tax computation, is this correct?

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Ahh I’ve probably got that wrong then Sophie 🙁 hopefully they give me something for the balancing allowance and that’s an advantage?

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I think for the second part of the inheritance tax question I put 05/06, 06/07 and then for the other clt 07/08. I just did them in order of which one appeared first. I can’t remember which answer it was.
What was the third question?
For the interest payable I said or is half of the income tax liability and the due dates are the 31st January and 31st July, so half will be paid in January and the rest in July. Don’t know if that is right.
For the indexation cost question, I don’t remember the answer, but the method of working is creating a share and indexed cost and then dividing the shares sold by the total number of shares and then multiplying that by the cost.

Is that what you did?

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Hi msarosh, yeah I spent like well over 10 minutes and couldn’t get it like you!

I did the same for the Hamish and Ivy question and the property income questions. Hopefully we get something from that 🙂

Yeah, inheritance tax was really confusing. You’ll get some credit for cooperation tax in the last question.

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Hi all, I found the exam quite difficult. The multiple choice questions were not very straightforward. I wasn’t too sure about the capital gains one and the vat one.
For section B, I couldn’t get the taper relief, but did everyone just deduct the clt for one of the questions? And leave the pet. The vat and cgt questions were rather tricky too!
For section c part a, I calculated the the income tax for the married couple abd the class 2 and 4 nics separately. Will I stil get some working marks? Also for the inheritance tax part inwthis question, were you just meant to do 325000 x 0 and then 9000000-325000 x 0.4?

For the next question (trading profit question, I did the proceeds and the loan less the legal costs on sale and purchase, and less the capital allowances. I think this is completely wrong as they weren’t asking for this? So will I get nothing?

Finally for the last question, the short life part, I stated it relates to a depooling election, and if the proceeds exceed the disposals we have a balancing allowance. Also if a short life allowance is less than a £1000 the company will be entitled to a 100% write off. For the final part of the question, I included the premium in the property income calculatoion and put the insurance only up to 31 March 2016, is this correct?

Sorry for rambling on! I’m worried I haven’t done enough to pass

Faze

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@faze50 said:
Hi all, I found the exam mixed. Section a was really hard but like a lot of people I got lots of c’s and a few b’s, hardly any d’s. Apart from the 2 convertible loan questions in section B, the rest seemed OK. I’m really worried about section c, I don’t think I accounted for the deferred consideration correctly. I also included inventory at fair value which I don’t think is correct. For the second part of section c, the think the majority of answers to part a may be wrong, will that automatically mean the rest of my answers are rendered wrong? Also do you get carried forward marking? Thanks!

Does anyone have any advice?

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Hi all, I found the exam mixed. Section a was really hard but like a lot of people I got lots of c’s and a few b’s, hardly any d’s. Apart from the 2 convertible loan questions in section B, the rest seemed OK. I’m really worried about section c, I don’t think I accounted for the deferred consideration correctly. I also included inventory at fair value which I don’t think is correct. For the second part of section c, the think the majority of answers to part a may be wrong, will that automatically mean the rest of my answers are rendered wrong? Also do you get carried forward marking? Thanks!

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Hi Sophie,

I’ve just been preparing for those type of questions too! I suppose the way they could ask worded questions would be on an ratio analysis question in part c asking you to interpret your results.

I’m so nervous about this exam!

Faze

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