ATX*** ACCA Paper ATX December 2018 Exam was.. Instant Poll and comments ***

They were definitely Wandas. You just needed to add them to what you calculated for Roth. I did the same as you with deducting the salary then partneshipt share %. On the company calculation, i took the 100k, deducted the salarys and then taxed the remainder at 19% (approx 4k), then added that to Roth tax liabilities and Wandas that were given. Similar?

@johnmoore said: I think your right When he died he gave 160,000 meaning at that point he used 160,000 of it 165000 was used Divided by 325000 Gave around 50 percnet Added it onto lucy band rate

Was the NRB on the first death different? Was it not also 325k? If they're the same then % will equal the same as taking it away right?

What did people put for the gift of the investment property in lifetime of on death? IHT= There was no NRB left, and she was dying in a year so no taper. If you gift it in life, then you can claim Fall in value relief for IHT. CGT= If you gift it, then its a disposal at a loss, which if was still a Capital loss at death, can be refunded by HMRC What did you guys put? A

Group relief question.. As it was a Capital Gains group, the qn said that Fip Ltd was not large. So i said Fip, should transfer their chargeable gains to the company that had the loss (cant remember maybe han) so that their TTP would be below 250k, which was the limit (1,500,000/6) Did you guys get the qtrly instalment for january 19 to be approx 25/26k?

Decision to delay the gift and sell to her son.... At first i was going to mention connected people, but then realised that the price being paid was the same (28 per share). So my only reason for delaying, was that she would get a new aea of 11,300 by waiting till may, because 10k (Approx) was used on the part disposal with cash on the takeover from vulcan. Then split her CGT payable withh 3500 at lower rate cgt 10% and the remainder at 20%. What did other people get?

Because 180000- current Annual exemption 3000 - last year's annual exemption 3000 so 174000. Then 325000-174000=151000 is the remaining band rate I got. I didn't reduce the cash that Pavel had kept aside for Wanda because according to me that was kept aside in the death estate and not gifted to her. It was mentioned that Pavel had made no lifetime gifts. This is why I did that calculation. I hope I pass.

Yes I did the same. 26000 pounds was the TTP for the company and 4940 was the CT payable. Then I calculated both Roth and Wanda's income tax liabilities in case of a partnership and company both. God! That sum was the most time consuming sum for me.

In question number 3, when mercury ltd took over Vulcan Ltd for a consideration of four shares for 20p and 15 pounds cash for every share held in Vulcan. There was 800 shares of Vulcan Ltd that Liber purchased for 14000 pounds. Did you'll get a capital loss in the disposal of cash? So basically I got 3200 shares * 20p which comes to 640 pounds. And cash element came to 800*15 that is 12000. The cost part to the cash element came to 12000/12640*14000= 13291. So a capital loss of 1291 pounds. Anyone getting a similar answer?

Easy questions but too much to write hence end up with very short answer last 2 questions

Wasn’t it 4 shares at £20 per share?? 3200 shares at 20 pound = 64000 and 12000 in cash. I didn’t see one example in my studies where a takeover/part disposal lead to a loss? It doesn’t make sense to give more cash then share value ?

I still remember they had written 20p and not 20 with the pound symbol. This indicates 3200*20÷100. In case you refer Kaplan publications, you can check chapter number 8, TYU 6.

Yes they had written £15 for the cash part. But shares they mentioned "four shares for 20p"

Yeah I was shocked when I calculated the capital loss so I rechecked the question paper and my answer. Yet no difference. So I thought this man is getting 3200 shares instead of 800 original shares so maybe something. Then I continued with my calculations. I hope I pass. I don't want to study this 1500 pages of book all over again.

your right I think it was 20 pound as too much difference from 20p to sell it for 28 pounds same here I do not want to resit I think it was a decent paper, not many reliefs but I made stupid mistakes. I think im issed a lot of silly marks as in for CFC questios and I think I was abit vague overall. the trading loss one I said maybe you can give it to fip and reduce ttp even more and yas Hassan my corporation payment was around 25k/26k btw what did everyone do for the annual allowance charge in the last question?

@daisypeg said: Yep I got around 4k corporation tax and then the actual total tax payable was around £58k and £56k with the limited company being the more tax efficient. Similar?

I cant remember the number, but i did say that the company was the cheaper option. Mostly because the dividend payment to Roth meant he could use his DNRB and the salaries were tax deductible etc

I wrote 40000 pounds to personal pension fund and 13000 by Poseidon Ltd into employer pension fund. This 13000 is an exemption benefit for that man while calculating his employment income. This total of 53000 towards pension fund is over the annual allowance of 40000 and hence it must be taxed to that man as a top slice of his income at the non savings tax rates. Also, his threshold income and adjusted net income is less than the limit of 110000 pounds and 150000 pounds so no restriction to be put on him. And I hope I get marks for this and pass the paper please.

hey yes I did the same thanks daisy I hopw we pass

@daisypeg said: The very last question was the non tax advantaged share scheme so I said he would have tax to pay at the exercise date calculated as the difference between the grant and exercise and there would be no cgt as the proceeds from the sale would be the same as the cost as he was acquiring and disposal on the same day

Same here. Grant= No tax....Exercise = Employment income = MV at sale date, less the MV x 95% What did you do for the payment for relocation? 5k tax free... The payments for rent, as taxable benefit?

yes I wrote cgt of ZERO aswell

relocation is 8k tax free exempt benefit that was abit hard for me, payments for reny I think I did do benefit that 20000 really confused me

For question 4 I thought his annual pension allowance was reduced as he had exceeded the £115 threshold (had a salary of £130k). The second test (once applied the 10% conts from employer) came to £143k, so annual allowance was restricted. It seems I have written completely different things to all of you :-(

@johnmoore said: relocation is 8k tax free exempt benefit that was abit hard for me, payments for reny I think I did do benefit that 20000 really confused me

While I wasn't sure what to do about the payment towards rent, I think there was a bit of a trick on the relocation costs. Don't remember the exact numbers, but they paid him something like £6,000 for relocating, but his actual costs in relocating were <£5,000 when you took out the fees on the same of his home, so I wrote the additional payment was taxable.

@johnmoore said: relocation is 8k tax free exempt benefit that was abit hard for me, payments for reny I think I did do benefit that 20000 really confused me

Agreed about the 8k limit, but the question said they only gave him 5k. The 20k lump sum is basically a golden hello, so taxable in full. The living accommodation was weird because they were giving him cash for the rents, rather than providing him with a property. Either way, i said it was a taxable benefit! The examiner really loves trying to trick people! Fingers crossed

@johnmoore said: yes I wrote cgt of ZERO aswell

Yup! Sold same day. Phew

I remember solving this. I did 5000+1500*4= 11000 he recieved. Relocation expenses exemption is 8000 pounds so taxable benefit is 3000. That 20000 pounds had to be treated as a golden hello to the employee and hence taxable on receipt basis.

In the text book, they mentioned for living accommodation is only taxable if the property is provided to the employee. In this case no property was provided but he was paid 1500 per month rent and that too the question specified for relocating.. hence, I added up to 5000 and did that treatment where in I got a net taxable benefit of 3000

@sanjanapaul1234 said: In the text book, they mentioned for living accommodation is only taxable if the property is provided to the employee. In this case no property was provided but he was paid 1500 per month rent and that too the question specified for relocating.. hence, I added up to 5000 and did that treatment where in I got a net taxable benefit of 3000

I didnt think a temporary flat counted as relocating? Granted they didn't own the property, but they were still paying him money for purposes of living, so i thought that had to be taxable employment income of some sort..

@daisypeg said: The group payment arrangement threw me as BPP didn't include it in their course notes only the big study text which I only glanced over so just used common sense and answered with reduced administration burden , reduced chance of paying late and hence interest being charged...

Yeah same.

yh same here just chanced it less admin, etc mroe control

i think i lost marks for that 5 markers taxable beenfit i said the 20k was exempt stupdi i know but that was the only question in the whole papaer made me confused even though i knew the rules :(