P6 Sept 16 Questions

1. Group structure Hltd 100% owner or J Ltd, F Ltd., C Ltd, S Ltd, L Ltd and 30% owner of another company. All UK Resident
F Ltd has trading loss of £540000. Chargeable gains of £65000, Capital loss £31000 and asset qualifying for Rollover relief £14000. Proceeds on disposal £125000 which was invested in asset bought.
1. Calculate chargeable gains for Fltd and advise on maximum reinvestment of the proceeds so that the gain arising is covered by the capital loss. I got £80000 reinvestment and nil chargeable gains as ROR was £51000.
1a. Relieving the loss in F Ltd in the most beneficial way. As all the companies are large and pay CT in instalments.
Profits in HLtd £180k
L ltd £375k
J ltd 410k
C ltd which only joined the group in 1 sept 2016 profits £675k
S ltd profit £30k and capital loss £48. Net loss 8k
1b. VAT refund has been given to HLtd but no reason as to why
1c.Group registration of VaT. All make standard rated supplies but only F Ltd is partial exempt trader and S Ltd uses Cash accountinh and annual accounting scheme

2. Wavereley
40 year old divorced with 2 children
Higher rate tax payer
Runs a sole trade since 1 March 2008
Wants to cease trade by incorporating a company Roller Ltd. Then Shares will be disposed off for £600k.
Value of assets held in sole trade is £540000 and capital gains in respect of assets £160k and goodwill £30k.
Shares issued in Roller Ltd 270000shares at £1each
He wants to leave UK and settle overseas after 5 April 17. His only home in UK will be disposed and gain arising covered by PPR. He will buy a new home overseas but wants to return to UK to visit his children
He also has an investment property which he will sell and give to his sister
1. Unicorportated business basis period
Profits allocation
Y.e 30 June 2016 £125600
P.e 15 Jan 2017 £74230
Give reason for
Further information required
explain
Incorporation relief claim beneficial or not
Max no of days can he stay in UK to maintain Non Uk resident status
Why is it Better to be non resident in 17/18. Shares acquired in Roller ltd to be sold 6 months after acquistion
Inheritance tax and capital gains tax implications on investment property disposed whilst Overseas and proceeds gift to sister. No gift relief available

4. Company share option scheme vs Employee Shareholder scheme
Compare and contrast tax implications on disposal of shares for Simon and Methyl ltd.
Simon Director of Methyl ltd
Additional rate taxpayer
£25000 shares worth to be awared in 16/17 tax year
4b. Company car vs beneficial loan
£9600 car value when given to employer which is £800 lower than list price
Diesel car emission 108g/km
Contributions towards car running costs by employee Chris £700
Chris is a higher rate taxpayer

Beneficial loan
£9600 interest free
Repaid in 3yrs

4c. Yara has overseas rental income £24000
Salary £80000
Remits £15000 rental income each year
Uk resident since 1 April 2008
Why is it not beneficial to claim remittance basis in 15/16

5a. Winding up of a limited company
State Ct implications?
I Forgot to say no Ct on winding up
How can profits be distributed to the A ltd shareholder 30% held by Alan
70% held by M ltd. Is it better to distribute profits before winding up or after?

5b. C ltd has trading losses in the year ended 30th June 16 and 31st march 17
Of £64000
How best to relieve it and what amount will be unrelieved.
Vat implications on cessation