TX*** F6 June 2013 Exam was... Post your comments ***

<cite>@oldc02 said:</cite> Confused - no I didn't use it as it was a PET. I did at first and then realised it was wrong.

I am hundred percent sure that NRBs are used on PETs!

<cite>@atab said:</cite> I calculated it as 10000 x 2.4 = 24,000 cost annual exemption = 10,600 24,000 + 10,600 = 34,600 34,600 / 4 = 8,650 shares (in order to avoid incurring a gain)

I think: when you calculate a gain involving subject matter that was sold at a below market value - as was the case here - you take market value as the deemed proceeds. So for 1 share: Deemed proceeds £4 Cost <u>(£2.40)</u> <b>Gain to tax now £1.60</B> £10,600 / £1.60 = 6625 shares

<cite>@mahoysam said:</cite> I am hundred percent sure that NRBs are used on PETs!

Yes I used the nil rate band for the death tax calculation of £325,000 but didn't use it in the lifetime question i.e the nil rate band given in the question for the 2008/09 tax year.

<cite>@oldc02 said:</cite> Confused - no I didn't use it as it was a PET. I did at first and then realised it was wrong.

erm, i used the NIL rate of £300,000 on the PET, which meant there was only £25,000 to use against the estate later (£325,000 less the £300,000 already used). Is that completely wrong? :(

It wasn't a bad paper at all - except as always question 4 with change in accounting period. I thought the only mileage that was allowable was between his place of work and clients visits and everything else was disallowed? I got 708 I think plus I think the amount you could extend his BRB were the gross amounts of personal pension contributions of 50000 which the question specifically said he maxed out on and did so for his previous years so I assumed no brought forward figures and extended the bands by 50K. Perhaps it was yet another example of the examiner trying to trip us up as usual? Did everyone include the overseas company in their associations also as I feel I was being a bit thick in places and forgot to include it in somewhere. What was Question 4b about? All you had to do was split the accounting periods? And Part 2 on 5? Had to do chargeable gains and income tax for 7 marks?? Talk about time pressure???

<cite>@oldc02 said:</cite> Yes I used the nil rate band for the death tax calculation of £325,000 but didn't use it in the lifetime question i.e the nil rate band given in the question for the 2008/09 tax year.

Dear, I cannot remember the numbers but NRBs are utilised in a chronological order, therefore, we should use it first on the PETs then if there is anything remaining we use it on the estate, in the question, there was nothing remaining for the estate... Anyways, there is no use of argument now, best of luck, I hope we all pass :)

also, i took off the £3000 annual exemption for both years and took away £5000 as it was a gift for his sons wedding

Yup the NRB was supposed to 325000 as it was when the guy died. You'd only use the 300000 when he was alive and when he makes donations into a trust (comp 1)

<cite>@dannyw1984 said:</cite> also, i took off the £3000 annual exemption for both years and took away £5000 as it was a gift for his sons wedding

correct :)

<cite>@charlotteo said:</cite> I think: when you calculate a gain involving subject matter that was sold at a below market value - as was the case here - you take market value as the deemed proceeds. So for 1 share: Deemed proceeds £4 Cost <u>(£2.40)</u> <b>Gain to tax now £1.60</B> £10,600 / £1.60 = 6625 shares

I agree with your workings but wasn't the market value £6.40 the cost £2.40 (she sold to her daughter for £4 which is irrelevant. ) Leaving a gain of £4 per share. 10600/4 = 2560??

<cite>@danf1981 said:</cite> It wasn't a bad paper at all - except as always question 4 with change in accounting period. I thought the only mileage that was allowable was between his place of work and clients visits and everything else was disallowed? I got 708 I think plus I think the amount you could extend his BRB were the gross amounts of personal pension contributions of 50000 which the question specifically said he maxed out on and did so for his previous years so I assumed no brought forward figures and extended the bands by 50K. Perhaps it was yet another example of the examiner trying to trip us up as usual? Did everyone include the overseas company in their associations also as I feel I was being a bit thick in places and forgot to include it in somewhere. What was Question 4b about? All you had to do was split the accounting periods? And Part 2 on 5? Had to do chargeable gains and income tax for 7 marks?? Talk about time pressure???

there was only one company i didn't include as an associate as it was under a 50% shareholding? therefore the upper limit and lower limit for marginal gains were reduced to £1,500,000/4 and £300,000/4.

<cite>@danf1981 said:</cite> Yup the NRB was supposed to 325000 as it was when the guy died. You'd only use the 300000 when he was alive and when he makes donations into a trust (comp 1)

Yes this is exactly what I did

Sorry guys, I am NOT reading anymore comments... I think I have done well, but the comments here confuse me lol Plus... whoever has F4 exam coming up, better stop talking about the past and focus on the coming exams! Best of luck to everyone :)

<cite>@atab said:</cite> 6 months did pass.....the receivable was due mid september.....it was written off end of March....that is 6 and a half months

I wasn't sure as I wasn't sure if it was from the date of the invoice Sep or the date the payment was due Oct. Knew I'd get it the wrong way around. Thanks

The nil rate band given in the question was irrelevant as it was a PET (Potentially EXEMPT Transfer) It is only relevanf for CLTs because they are chargeable when gifted. In the VAT Private Fuel, the full 300 was deductible, right? (as it was already scaled for the quarter)

I got this MV at date of disposal 10000 x 6.4 64000 Cost to whoever 10000 x 2.4 24000 gAins 40000 less AE 10600 Chargeable 24400 24400 divided by 4 = 6100

<cite>@atab said:</cite> How did the second one get full rollover relief? Isn't is restricted to the difference between proceeds and amount reinvested?

Yup and the amount invested was higher than the s.p.

<cite>@duffielda52 said:</cite> I agree with your workings but wasn't the market value £6.40 the cost £2.40 (she sold to her daughter for £4 which is irrelevant. ) Leaving a gain of £4 per share. 10600/4 = 2560??

That makes sense - I thought there was gift relief but didn't remember that the market value was £6.40. Therefore: Deemed Proceeds £6.40 (market value) Cost (£2.40) Gift Relief (£2.40) Gain to tax now £1.60 (£4 actual proceeds less £2.40 cost)

<cite>@atab said:</cite> How did the second one get full rollover relief? Isn't is restricted to the difference between proceeds and amount reinvested?

Yes I put it as restricted too as all of the sale proceeds were not re-invested. I think I got a chargeable gain of £12,000 on warehouse two.

I did a question twice giving two different answers cuz I wasn't sure which method to use for the company one. Will I get penalised for it?

<cite>@leannegina said:</cite> for malaysia variant, it was kinda straight forward. hope can score well

u remmember your any answers ? my paper was not good i didn t what to do in q3 iba .... RPGT gain WAS 144000?

<cite>@faranjamal said:</cite> The nil rate band given in the question was irrelevant as it was a PET (Potentially EXEMPT Transfer) It is only relevanf for CLTs because they are chargeable when gifted. In the VAT Private Fuel, the full 300 was deductible, right? (as it was already scaled for the quarter)

No, the scale charge for the ¼ was inclusive of VAT. Therefore the £50 VAT element was to be added to the output VAT only, I thought?

it was kind of tight but i still keep my head up for that PASS.

<cite>@oldc02 said:</cite> I wasn't sure as I wasn't sure if it was from the date of the invoice Sep or the date the payment was due Oct. Knew I'd get it the wrong way around. Thanks

I got that the impairment was disallowable: in order for bad debt relief to be claimed, 6 months atfer the DUE date must have passed. It was due in October I think and so April would have been the earliest that bad debt relief could be claimed. This was the VAT return for the ¼ ended March so bad debt relief could not yet be claimed.

<cite>@charlotteo said:</cite> I got that the impairment was disallowable: in order for bad debt relief to be claimed, 6 months atfer the DUE date must have passed. It was due in October I think and so April would have been the earliest that bad debt relief could be claimed. This was the VAT return for the ¼ ended March so bad debt relief could not yet be claimed.

Oh that's good then as that it was I thought. Thanks for clarifying

It was ok , although a few mistakes here n there , i forgot to calculate the marginal relief don't know :( how i forget it .. how many marks do i lose for that 1 or 2 ?

<cite>@oldc02 said:</cite> Yes this is exactly what I did

I thought that only 2 companies were associates: I think they were Are and Can (Greenzone owned 60% and 90% I think?) The other UK co was only 40% owned. The other co was not a UK company - I was not sure on this though. I thought overseas branches were fine, but overseas entities were not.

<cite>@charlotteo said:</cite> No, the scale charge for the ¼ was inclusive of VAT. Therefore the £50 VAT element was to be added to the output VAT only, I thought?

The 300 was the amount? Damn! I thought it was the VAT, shit. I am losing 1 mark per comment :P

<cite>@charlotteo said:</cite> I thought that only 2 companies were associates: I think they were Are and Can (Greenzone owned 60% and 90% I think?) The other UK co was only 40% owned. The other co was not a UK company - I was not sure on this though. I thought overseas branches were fine, but overseas entities were not.

Thats exactly what I thought

<cite>@charlotteo said:</cite> I thought that only 2 companies were associates: I think they were Are and Can (Greenzone owned 60% and 90% I think?) The other UK co was only 40% owned. The other co was not a UK company - I was not sure on this though. I thought overseas branches were fine, but overseas entities were not.

There were 4 in the group, because the only rule is >50% shareholding. Residence status is irrelevant. So that makes 3 associated companies + 1 the parent itself.