*** ACCA P6 December 2016 Exam was.. Instant Poll and comments ***

Hi everyone,

I found Q1 was really wordy, it gives me lots of clues while reading it. I thought too much about it and don’t know what the question asked about! especially part a

so I did part b & c those are straightforward.

q2. It was not easy because without numbers in them, I feel it hard to describe it. I did not perform well.

q3 I am confused about the first question. It seems Alley Ltd who sell the building to Begel Ltd in 1.5.2010? before Begel join the group with Lob Ltd and Tree ltd. and then when Begel join the group 30.09.16, Alley no long belongs to Lob group. I might misreading this. I was expecting this is a no gain no loss transfer. Any one has a comment on this? glad this is 3 marks. b& c & d seems alright. I think one of them is PE loss relief need to take account DTR.

q5 (just read about it before the exam! phew! )

Then I get back to Q1 and in the last half an hour. I figure out this is as simple as sole trade VS employment income.

One thing I learnt from this exam is I need to encourage myself all the way through even though I don’t understand the question. I performed badly at the beginning, but never lose faith that I will pass. and try to complete as much as I can.

This is my last exam, really wish I can pass it. Good luck everyone.

Q3A)
London 80 WROTE
‘what was the base cost of the building? …… As the company had bought the building of its parent it would have had to pay a degrouping charge as it left within 6 yrs so then you couldn’t possibly use the old base cost as cost? ‘

However Alley (Parent) sold to Begel (acquired an asset) on 1.5.2010 and Alley left the group rather than Begel.

1 Oct 16 or market value of warehouse base cost for begel plus indexation allowance from May 2010 to Oct 2016 – this is the base cost for future disposal

Nov 16 (date of transfer to the new company) -Begel sells warehouse to third party outside the 75% group (proceeds for Begel Ltd) – use this base cost plus indexation allowance again calculated from Oct 2016 to Nov 2016
Alley left Lob group on sept 16 (which is greater than 6 years anyway)
Begel has joined the group with Lob Ltd and Tree ltd. (Do not remember date)

degrouping definition is ..If a company leaves a group within 6 years after acquiring asset from another company within a chargeable gains group then there is a degrouping charge’ this degrouping charge is added to consideration received on the sale of the company leaving.
I don’t think degrouping is involved

3c or 3d) Group payment arrangements – does anyone know what is this about

Group payment is for 51% groups, but I got it mixed up with instalments and pratted on about large companies and dividing the limit by 3 – WRONG! I did mention about offsetting payments and refunds to improve cashflow, so scrapped half a mark probably!

How to calculate post tax cost of employer in q5 part a ?

@adil22 said:
Examiner did not ask to calculate profit of 2017/18 he asked to calculate nic 4 of 2016/17 only then y to calculate profit of 2017/18 ? Xolilee

The guy was a retiring partner so we have to apply the cessation rule. The basis period of assessment for 16/17 would be from 01/05/2015 – 31/12/2016.

Q3 – I remember there being a bit about a building being transferred intra-group on a “no gain no loss” basis. The building is subsequently sold at a loss to the group. Therefore you couldn’t use indexation allowance to increase a loss.

Thanks everyone for the workings for Q1, I missed the corporation tax deductions. I read that question about 10 times before it began to sink in what I had to do! Gah.

@london80 said:
Q2 the boat was a wasting chattel .

Oops, I’ve forgot it 🙁

Hi Danny, I think there was a question about the conditions for incorporation relief to apply. My memory is failing me a bit so I’m not 100% sure.