*** P6 June 2012 Exam was … Comments and Instant Poll ***

L&B 1/10* original vat *(original%-current%)

Positive: pay
Negative: claim

@amjad said:
question about the VAT of Capital Goods Scheme in part three how to calculate this as it was never tested before

Well vat charged was given I.e 70000

So initial recovery was 70000 * 70%

Afterwards partial exemptions applied
70000 * 1/10 (55 – 70 )
70000 * 1/10 ( 50 – 55 )

At disposal I didn’t know what to do

Does anyone remember how many marks the capital goods scheme question was for

Q1 – IT WAS SIMPLE QUESTION WHERE TWO OPTIONS OF IHT & CGT TOTAL IN EACH OPTION AND THEN COMPAIR THE TWO OPTIONS AND ANY ASSUMPTIONS MADE AND THEN ITS SUMMERY CONCLUSION BUT WHAT ABOUT THE LAST PART OF QUESTION 1 B EITHER IT WAS ON ETHICS OF CALCULATING WRONG RETURN AND DISCLOSING TO HMRC PLEASE REPLY

Amjad – yes there was a letter to do on ethics at the end of Q1. I said it was the clients responsibility to inform HMRC asap otherwise we would need to consider our position and said it was in their interest to do this, so HMRC would take the view of an unprompted disclosure. Also, said interest would be charged on any overdue tax.
Jessieyangli – I do remember mentioning TOGC and the conditions necessary for that, I think part a Q3.
Q4 – I worked out the partial exemptions as 49000 x 1/10 x (55%-70%) then 49000 x 1/10 x (50%-55%), but then forgot to even mention the disposal, thought this was all that was needed! but think it was now.
I don’t think this was many marks though, 4-5 maybe?

Actually in Q1 – you also had to mention about the CGT implications – I said gift relief was available on the farmland in full – anyone else do this? and for the Villa, I just did a straight forward calculation with no reliefs and said it was not considered an FHL as it had a long term tenant – Anyone do anything different?

Greetings my fellow students.

I found this paper ok and done questions 1,2,3 and 4.

Question one was IHT, CGT and ethics.

The crux of the question was comparing the IHT and CGT liabilities upon the death of Una or if she gifted it to Won on his birthday.

For the IHT liability when Una died I mentioned that the farmland would have APR as it had been owned and farmed for the last two/seven years respectively. But only upto the point of the agricultural value which I think was 35%? given in the question.

I also said that Una’s NRB would be fully available as the PET made to Won (cash) was more then seven years ago. And Won’s AE and the bought forward AE could be used. I now realise that the amount I should have used was the DTR value given. But I reckon I got some marks talking about the various reliefs.

Gifting it to Won would be a PET which would be chargable because Una had died within seven years. The same applied above but in addition Taper relier could also be used.

For the CGT liability I said that gift relief could be used on the farm as both Won and Una were res/ord res. And that notification would have to be given within four tax years. In additon because this has been gifted for IHT purposes then Gift relief would automatically apply.

For the villa because this was outside the EU it is not a FHL, and is an investment property so I don’t think any reliefs are avaliable (or least I did not put any down). However the income is being taxed at 50% and because Una is a HR payer at 40% and because of DTR then she is paying an additional 10% for nothing when I wrote down the summary and assumptions.

In the letter I mentioned ethics and the PLR of 30% charged that Una would have to pay. Also about disclosure and the fact that we would not be able to act for her if she did not disclose.and would have to notify HMRC. Signing the letter as well for that extra mark.

Question 2 was my hardest question I curse now that I did not do more work on VAT. The group relief I felt was ok and I think I had three companies that could claim group relief. BUt the associated companies was six I think so that would mean the UL and LL been divided by six. Then a case of relief given against MR of 27.5%, MR of 26% and SR of 20%.

The disposal of the business asset I said would lead to a charge as a CGT group did not exist and that we would need the indexed gain to order to fully work out the chargable gain.

The VAT parts I waffled through, don’t think I scored anything.

The Shareholding was over 10% and therefore exempt even when partly disposed.

And as for the Group FD I said that she should be a qualified accountant and mentioned that the CT liablity would be her responsibility to make sure that the tax is worked out correctly and paid on time and that internal controls were in place in order for this t be carried out correctly.

Question 3 the first part I again waffled through.

The lease for the car I felt was ok, working out the taxable benefit the class 1a con for the employer etc.

The last part on the employee working abroad it was a case of wholly and exclusively etc, etc. And that his wife and kid were allowed to visit him twice a year and that the expenses were allowable.

Question 4 was a gift. Statutory redundancy is exempt, and the first 30k is ex gratia with the remainder and the golden goodbye classed as earnings.

The Class IV was fine.

The VCT and pension was good although I missed out on the adjusted income for the pension. The income at £120k would have no PA but adjusted for the pension con should have some PA.

Then talked about about the VCT reducer at 30%, div rec are tax free, exempt form CGT and must be kept for five years.

The above is what I put down and is by no means ‘correct’.

Good luck everyone come the 8/8.

Q1 was a disaster for me. I knew all about iht and cgt but didn’t know how to approach the question. Hoping I get enough marks from my illogical answer to pass the question. I thought the letter was the only part I made a reasonable attempt at on Q1, mentioned 30% of plr and disclosing to reduce penalty and ceasing to act if she didn’t.

Q2 I thought was ok. Group losses and consortium relief. I said for the cgt calculation we needed the original cost which the question didn’t state. Didn’t answer the bit on patents. Then there was capital goods scheme and substantial shareholding exemption.

Q3 more VAT, about the sale of a going concern (I said outside scope) but also a new building (less than 3 years old so standard rated??). Then benefits etc.

Q4 was my favourite. Redundancy, calculating ni (had to do the partnership profit split first then actual basis), and vct (30% tax reducer) v pension contributions.

Really hoping for 50 but I know my attempt at question 1 may prevent that 🙁

Good luck everyone!

lee1010,
Thanks for your reply, I seem to have gone along the same lines as you in most of what you have said. I’m starting to think I might be in with a shout! Just hope I’ve done enough.
I think Gift relief is available on any asset where APR is available, and I think the question said the farm was under a tenant, so I just stated my assumption was that it had been farmed for 7yrs.

50 will do! Good luck everyone!

i made the most carndinal sin in Q2 and failed to pick up on the whole question and somehow missed the whole consortium sentence! Cant believe i did that – never happened to me before. Only noticed when it was time to move on to the next question so i did loss relief as per two companies without consortium relief. Do you think there are any marks for this?
Didnt even have time at the end to state that consortium should have been taken in to consideration but left out in error!
All in all, my knowledge was good but exam technique was terrible i think which is gutting to be honest as practiced a lot of questions but obviously not enough.
I failed F7 for the same reason a year back or so and thought my revision had got the technique nailed. It’s sad when you have the knowledge but cant apply it well enough but no-one to blame except me for that.
Overall, i thought the exam was fair enough – i just hope the December one is too because i’ll be seeing it again i fear!

Hi
Looking at the P6 June 2012 exam paper from the ACCA website, it seems like there was missing inforamtion on question one! (The attachment schedule for details of Farmland and Villa from Una was never there and I wondered why there were no figures to calculate) or not sure if I missed it as this is the first time i am seeing this info from exam paper from the internet today!! err…
Anyone having same doubts?
Please help. anyone know how many marks I have lost on this piece of info?
much appreciated.thanks
Jo.

HI Guys,

I’m planning to self study P6, P7 and P3 for this Dec 2012 exam. Anyone can suggest which textbook would the best to study for this papers – is it GTG, Kaplan or BPP? Pls recommend.

Thank you

I would definitely recommend Kaplan for P6 and P3, I self studied for these subject too and the text books were really good.