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I got that question about the gifts from the non-Domiciled Aunt.
Although I forgot to use the Nil Rate Band in the calculation 🙁For the Gift of Cash – exempt as over 7 years old
For the Gift of UK Shares – chargeable but could claim taper relief as 5-6 years ago
For the Gift of House – exempt as it was situated overseas, so not chargeable for UK IHTA lot of this was guessing as I don’t remember practicing a question like this… Hope I got some of it right.
What did others write for this question?
I did the same, and got a trading loss of around £48k. I hope it was right!
What options for relieving the loss did you write down?I mentioned that:
1) He could carry back the loss or
2) Relieve it in the current year, but this would result in a carried forward loss, which he didn’t want.Were there some other options available?
Did anyone get the question about the Additional Income after Tax for Carmen after she had been given a House by her mother?
I wasn’t sure if it was asking for us to calculate just the Additional Income after she had been given the House, or her Total Income in the Tax Year less any Tax. There was information on her Salary and Travel Benefits so I assumed we needed to use these in the calculation.
I sat the exam in the afternoon as well. I found it really difficult to link information from the scenario to the requirements.
I really struggled with question 3, on evaluating the Activity Based Management. We had to relate it to the systems of the business, but I was struggling to think of ways to relate it?
What did you guys write for this question?I think I used the original Cost as Year 0 then I calculated each year’s depreciation as laid out in the question. Then the balance for years 3 and 4 I used in each of the EAC calculations, as these were the resale values.
So I calculated it like this (although the figures are probably different to the exam):
Year 0 800,000
Depn 25% -200,000
Year 1 600,000
Depn 25% -150,000
etc.How did you find the last written question, 2c? I wrote about how Discounted Cash Flows take the Time Value of money into account. I tried to expand on this as much as I could, but couldn’t think of much more to say!
For me there was a 4 mark written question asking to discuss the reasons that EAC should be used when appraising Replacement Cycles. I explained how EAC works, that it helps you to compare two investments of different lifetimes by calculating the Annual Cost.
Nikko wrote:In the WACC question, there was a 9 marker which asked whether WACC would increase or decrease after the investors converted the loan notes into shares.
I got this as well!
I spoke about the equity of the company increasing once the loan notes were converted. And that this would increase the WACC as Cost of Equity is more expensive than Cost of Debt due to debt having tax relief… I talked about the Gearing ratio decreasing due to the rise in Equity compared to Debt.
I wasn’t sure if we had to mention the Capital Structure theories (M&M, Traditional) so I briefly talked about these. I hope I wrote enough as it was a 9 mark question!
Nikko wrote:For people who did the Section C EAC question; which replacement interval was better?
I calculated that the 4 year replacement cycle was better, as it had a lower cost by about $8.5K. Not sure if I was right though..
Also, did you calculate the Initial Investment in Year 0 or Year 1? I thought I should put it in year 1, as the machinery wasn’t paid for until a year after delivery…
Mee too
Larisa12 wrote:Net Cost of finance in FRA question of part B was tough, i just had to guess…
I had to guess on this too! I found the question wording really confusing.. so many different interest rates..
I got these Section B questions too.
If possible, please could you let me know what you answered for the Forex/Interest Risk questions? I had to guess on most of those, as I hadn’t done enough revision and found the question wording very confusing… I’m hoping one of my guesses were correct!
jesseady1 wrote:Yes i got this one to and went with submitting & keeping digital records as at my work we use MTD and still have to make the payment from the bank ourselves
Oh that’s a relief – I picked those two as well! Thank you for that – my study books didn’t have much to say about MTD, so I had to wing that question in the exam.
zachmorris wrote:I sat the Tax exam yesterday and when answering Section C questions I put a £ in each cell instead of just putting one £ at the top of the column and numbers below.
Hi Zach,
I don’t think you can lose marks for something like this. I didn’t use any currency symbols in the section C questions of my Taxation exam yesterday. As far as I am aware, the ACCA markers are only interested in the figures, they aren’t going to be particular about the currency symbols.
I am interested to hear what other ACCA students say though 🙂
jesseady1 wrote:Yes i got this one to and went with submitting & keeping digital records as at my work we use MTD and still have to make the payment from the bank ourselves
Oh that’s a relief – I picked those two as well! Thank you for that – my study books didn’t have much to say about MTD, so I had to wing that question in the exam.
Hi Zach,
I don’t think you can lose marks for something like this. I didn’t use any currency symbols in the section C questions of my Taxation exam yesterday (I never used them in my practice questions, and when I got these marked by my tutor I didn’t lose marks).
As far as I am aware, the ACCA markers are only interested in the figures, they aren’t going to be particular about where/if you use the £ sign.
I am interested to hear what other ACCA students say though 🙂
Oh that’s a relief – I picked those two as well! Thank you for that – my study books didn’t have much to say about MTD, so I had to wing that question in the exam.
Also, did anyone get a question on what MTD software is used for?
The options (you had to pick 2) were:
-to pay VAT
-to submit VAT return
-to keep digital accounting records
-to communicate with HMRCI picked “to submit VAT return” and then struggled to choose between “to keep digital accounting records” and “to pay VAT bills”…
Hi Justina, I got the same exam as you I think, with all the CGT Section B questions. I didn’t like those!
How did you answer the question – where there was a gain of £60,000 but part of it qualified as ROR? The question asked for the amount of the gain which would be chargeable now?
Thank You!
Also, how did you advise Halina (the section C 10 mark question where you had to advise her whether she should start trading as a sole trader or Ltd Company)? I advised her to commence as a Ltd company, as she would benefit from the lower Income Tax rates charged on Dividends, and therefore has less Income Tax Liability overall.
The exam was really tough.
I originally answered with the two highest %s, and after researching I think this answer was correct, but afterwards I changed it to the two lowest %s…
Also, there was a question about the Base Cost of new Shares after the company was taken over… I wasn’t sure if it was the price per share which she paid for the old shares x the amount of new shares which she received?
