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Time mgt was a must for today’s exam!
Tough one! The losses question threw me a bit- I went for FIFO from three years back. But I think there was a lot more to it that I have missed since both parts was 18 marks.
One on capital allowances over rental was ok.
Though the overseas one of whether to go with subsidiary or PE was difficult.Will be tight!
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Hi. You remember how much for the adjusted trading loss? (I didn’t scale down the capital allowance to 5/12)
Also i think he was a sole trader so the losses was against his trading income rather than his total income if im not mistaken
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Anyone remember weightage of marks of each question?
What was the Question one
Question two
Question three
And Question four.Please share in here so it would be beneficial for next session.
Thanks.
No, it’s only the AIA that should have been reduced. But there was no need since the cost of the purchase is less than the AIA available
33,333 I think I got (5/12 * £80k) as a capital allowance
The loss I can’t remember .
Anyone have the IHT with the aunt living overseas ? Does she still got nrb ? I put yes and no rnrb in calcs
mzdarme wrote:It’s 31,125 if you pro rate yearly interest payment by 5/12
What was the Question one
Question two
Question three
And Question four.Please share in here so it would be beneficial for next session.
Thanks.
I think I thought the AIA available allowance was pro rated only so 5/12 x £1m, so it would still cover the £80k.
I’m second guessing myself now lol!
Think I got a loss of about £48k?
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 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?
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?
For relieving the loss, could they use early loss relief on fifo basis ? So carry back to three years..
For the Carmen one, I think she got tax relief on letting the house out as shared occupancy ? First £7,5k tax free ? That was the main extra income savingI used opening year relief and suggested this would be better used than previous 12m loss relief as it would preserve the personal allowance.
Also had the Carmen question, I did a comparison of what the after tax income less the expenditure would be to show how better Carmen would be after the new plan of renting the room out.
Lots of guess work today and forcing theory discussion into my answers. Hopefully we all did enough!
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Question one was on
A) loss on commencement of unincorporated business with calculation of adjusted trading loss when he changes decision about his purchase instead of rental of machinery. So a but is capital allowance
How the loss can be relieved
18 markB) VAT registration date for the business and advise about cash accounting scheme and/or annual accounting scheme
8 marksC) he received a refund of income tax from HMRC and reluctant to report the matter. Action from your firm
5 marksThat was the last question I did so I remember it well. Would be grateful if the others can help you with the other questions.
Correct, but will have been rent a room relief. Steps I made were;
– Calculate benefit for fuel
– Work out income tax
– Deduct income tax and expenses from income.Then do the same again for the income after gift, making note of:
– Reduce expense by rental payments
– Increase expense by house expenses
– Use rent a room relief- Topics: 0
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Jakedh wrote:Correct, but will have been rent a room relief. Steps I made were;
– Calculate benefit for fuel<br>– Work out income tax<br>– Deduct income tax and expenses from income.You remember the marking for the whole question? And which number it was?
Same to me, the time management was so hard and the questions very tricky with small bits everywhere to confuse us.
Re the IHT question aunt was not a uk resident so no NRB to claim.
Re AIA there was no apportion as the allowance is for the financial year so there was 130% capital allowance available.Re overseas got so confused that I can’t even remember the question?
Did anyone else write the ZAF variant? Felt the paper was fair but I ran out of time on the small business/CFC no. 3 question. I hope I got enough marks for a pass though…
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