天津财经大学 最新ACCA注册会计师考试 p6uk_ 最低第8_jun_a
Professional Level –Options Module, Paper P6 (UK)
Advanced Taxation (United Kingdom)June 2008 Answers
1Memorandum
To Tax manager
From Tax assistant
Date 2 June 2008
Subject Saturn Ltd group of companies
This memorandum considers a number of issues raised by Daniel Dare (DD), the managing director of Saturn Ltd.
(a)(i)Dione Ltd – Value of tax loss
–Any amount of the loss can be surrendered to the UK resident members of the 75% loss group, i.e. Saturn Ltd and Rhea Ltd.
–The maximum tax saving will be obtained by offsetting the loss against profits between the limits for the small companies rate of corporation tax. The limits are divided by four as there are four associated companies (Titan Inc
is included as overseas companies are associated for the purposes of determining the rate of corporation tax).
Accordingly, for the year ending 30 June 2008 the limits are £75,000 and £375,000.
–The maximum tax saving will be achieved by surrendering the loss to Saturn Ltd. The first £10,000 of loss will relieve profits at the full rate of tax and the balance of the loss will save tax at 32·5%. Surrendering the loss to
Rhea Ltd would only save tax at 30%.
–The dividend received by Saturn Ltd does not affect its corporation tax liability. Dividends received from UK resident companies are not subject to corporation tax and dividends received from a 51% subsidiary are not franked
investment income.
–The corporation tax saved via the offset of the loss will be £60,525 ((£10,000 x 30%) + (£177,000 x 32·5%)).
–The claim must be submitted by 30 June 2010 (one year after the filing date of the corporation tax return).
Further information required:
–Income and gains of Dione Ltd for the year ended 30 June 2007
The loss could be carried back for offset against the total profits of Dione Ltd for the year ended 30 June 2007.
Whether or not this would be advantageous would depend on the company’s total profits for that year. Although
the maximum additional tax saving would be very small, there would be a cashflow benefit.
(ii)Tethys Ltd –Use of trading loss
–The two companies will not be in a group relief group as Saturn Ltd will not own 75% of T ethys Ltd.
–For a consortium to exist, 75% of the ordinary share capital of T ethys Ltd must be held by companies which each hold at least 5%. Accordingly, T ethys Ltd will be a consortium company if the balance of its share capital is owned
by Clangers Ltd but not if it is owned by Edith Clanger.
–If T ethys Ltd qualifies as a consortium company: 65% of its trading losses in the period from 1 August 2008 to
31 December 2008 can be surrendered to Saturn Ltd, i.e. £21,667 (£80,000 x 5/12 x 65%).
–If T ethys Ltd does not qualify as a consortium company: none of its loss can be surrendered to Saturn Ltd.
–The acquisition of 65% of T ethys Ltd is a change in ownership of the company. If there is a major change in the nature or conduct of the trade of T ethys Ltd within three years of 1 August 2008, the loss arising prior to that date
cannot be carried forward for relief in the future.
Further information required:
–Ownership of the balance of the share capital of T ethys Ltd.
(iii)Tethys Ltd –Sale of the manufacturing premises
Value added tax (VAT)
–The building is not a new building (i.e. it is more than three years old). Accordingly, the sale of the building is an exempt supply and VAT should not be charged unless T ethys Ltd has opted to tax the building in the past.
T axable profits on sale
–There will be no balancing adjustment in respect of industrial building allowances as the building is to be sold on or after 21 March 2007.
–The capital gain arising on the sale of the building will be £97,760 (£240,000 – (£112,000 x 1·27)).
Rollover relief
–T ethys Ltd is not in a capital gains group with Saturn Ltd. Accordingly, rollover relief will only be available if T ethys Ltd, rather than any of the other Saturn Ltd group companies, acquires sufficient qualifying business assets.
–The amount of sales proceeds not spent in the qualifying period is chargeable, i.e. £40,000 (£240,000 –£200,000). The balance of the gain, £57,760 (£97,760 – £40,000), can be rolled over.
–Qualifying business assets include land and buildings and fixed plant and machinery. The assets must be brought into immediate use in the company’s trade.
–The assets must be acquired in the four-year period beginning one year prior to the sale of the manufacturing premises.
Further information required:
–Whether or not T ethys Ltd has opted to tax the building in the past for the purposes of VAT.
(iv)Stamp duty and stamp duty land tax
–The purchase of T ethys Ltd will give rise to a liability to ad valorem stamp duty of £1,175 (£235,000 x 0·5%).
The stamp duty must be paid by Saturn Ltd within 30 days of the share transfer in order to avoid interest being
charged. It is not an allowable expense for the purposes of corporation tax.
(b)Before agreeing to become tax advisers to the Saturn Ltd group
Information needed:
–Proof of incorporation and primary business address and registered office.
–The structure, directors and shareholders of the company.
–The identities of those persons instructing the firm on behalf of the company and those persons that are authorised to do so.
Action to take:
–Consider whether becoming tax advisers to the Saturn Ltd group would create any threats to compliance with the fundamental principles of professional ethics, for example integrity and professional competence. Where such threats
exist, we should not accept the appointment unless the threats can be reduced to an acceptable level via the
implementation of safeguards.
–Contact the existing tax adviser in order to ensure that there has been no action by the Saturn Ltd group that would, on ethical grounds, preclude us from accepting appointment.
2(a)John and Maureen Robinson – Additional tax payable
Additional income tax payable – 2005/06
££
2,550 x 22% (property income (W1))561
1,587 x 20% (interest income (W1))317
–––––
4,137 (remainder of basic rate band (W2))
–––––
1,443 x 40% (interest income (£3,030 – £1,587))577
9,840 x 32·5% (dividend income (W1))3,198
–––––––
4,653 Less:T ax credits
£3,030 x 20%(606)
£9,840 x 10%(984)
–––––––
3,063 T ax paid by Maureen (W3)(561)
–––––––Additional income tax payable2,502
–––––––Additional capital gains tax payable – 2005/06
£
Chargeable gain13,470
Annual exemption(9,200)
–––––––T axable gain4,270
–––––––Additional capital gains tax payable (£4,270 x (40% – 20%)) (Note)854
–––––––Note: The taxable gain fell into Maureen’s basic rate band but will now be taxed at 40% in John’s hands.
Tutorial note
The gift of the property to Maureen would not be effective for capital gains tax purposes due to the prior agreement whereby Maureen gave the sales proceeds to John.
Additional income tax payable – 2006/07
££
393 x 20% (interest income (W1))79
––––––
393 (remainder of basic rate band (W2))
––––––
2,827 x 40% (interest income (£3,220 – £393))1,131
144 x 40% (interest income – Penny (W1))58
10,120 x 32.5% (dividend income (W1))3,289
––––––
4,557
Less:T ax credits
£3,220 x 20%(644)
£10,120 x 10%(1,012)
––––––
2,901
T ax paid by Maureen (W4)(473)
––––––
Additional income tax payable2,428
––––––
T otal additional tax payable (£2,502 + £854 + £2,428)5,784
––––––
Workings
1.John – Additional taxable income
2005/062006/07
££Arising on inherited assets:
Property income2,550–
Interest income (£2,424/£2,576 x 100/80)3,0303,220
Dividend income (£8,856/£9,108 x 100/90)9,84010,120 Children’s bank accounts:
Will – below de minimis limit of £100––
Penny –144
2.John – Remainder of basic rate band
2005/062006/07
££Salary29,40030,500
Car benefit:
15 + (185 – 140)/5 = 24%
£17,400 x 24% x 8/122,784
£17,400 x 24%4,176 Fuel benefit:
£14,400 x 24% x 8/122,304
£14,400 x 24%3,456 T rust income (£720/£780 x 100/60)1,2001,300
Less:Personal allowance(5,225)(5,225)
––––––––––––––
30,46334,207 Basic rate band34,60034,600
––––––––––––––Remainder of basic rate band4,137393
––––––––––––––
3.Maureen – T ax paid on investment income 2005/06
£T rading income (W5)11,845
Property income 2,550
Interest income (W1)3,030
Dividend income (W1)9,840
–––––––
27,265 Less:Personal allowance(5,225)
–––––––T axable income22,040
–––––––T ax on property income (Note)
£2,550 x 22%561
–––––––Note:All of the investment income fell into the basic rate band. The tax liability in respect of the interest and dividend income was covered by the related tax credits. Accordingly, in respect of the income arising on the inherited assets, only the property income gave rise to income tax payable.
4.Maureen – T ax paid on investment income 2006/07
£
T rading income (W5)28,590
Interest income (W1)3,220
Dividend income (W1)10,120
–––––––
41,930
Less:Personal allowance(5,225)
–––––––
T axable income36,705
–––––––
T ax on dividend income in higher rate band (Note)
£2,105 x 32·5%684
Less:T ax credit
£2,105 x 10%(211)
–––––––
473
–––––––
Note:The tax liability in respect of the investment income that fell into the basic rate band was covered by the related tax credits. Accordingly, income tax was payable in respect of the dividend income that fell into the higher rate
band only, i.e. £2,105 (£36,705 – £34,600).
5.Maureen – T rading income
Period ended Year ended
30 September 200630 September 2007
££
Adjusted trading profit28,40031,240
Less:Capital allowances (£5,850 x 40%)(2,340)
(£5,850 – £2,340) x 25%(878)
––––––––––––––
26,06030,362
––––––––––––––
2005/06
1 November 2005 to 5 April 2006 (£26,060 x 5/11)11,845
–––––––
2006/07
1 November 2005 to 31 October 2006
1 November 2005 to 30 September 200626,060
1 October 2006 to 31 October 2006 (£30,36
2 x 1/12)2,530
–––––––
28,590
–––––––
(b)Advice on Maureen’s VAT position
Deregistration
In order to voluntarily deregister for VAT you must satisfy HMRC that the value of your taxable supplies in the next twelve months will not exceed £62,000. You will then be deregistered with effect from the date of your request or a later date as agreed with HMRC.
On deregistering you are regarded as making a supply of all stocks and equipment in respect of which input tax has been claimed. However, the VAT on this deemed supply need only be paid to HMRC if it exceeds £1,000.
Once you have deregistered, you must no longer charge VAT on your sales. You will also be unable to recover the input tax on the costs incurred by your business. Instead, the VAT you pay on your costs will be allowable when computing your taxable profits.
You should monitor your sales on a monthly basis; if your sales in a twelve-month period exceed £64,000 you must notify HMRC within the 30 days following the end of the twelve-month period. You will be registered from the end of the month following the end of the twelve-month period.
Flat rate scheme
Rather than deregistering you may wish to consider operating the flat rate scheme. This would reduce the amount of administration as you would no longer need to record and claim input tax in respect of the costs incurred by your business.
Under the flat rate scheme you would continue to charge your customers VAT in the way that you do at the moment. You would then pay HMRC a fixed percentage of your VAT inclusive turnover each quarter rather than calculating output tax less input tax. This may be financially advantageous as compared with deregistering; I would be happy to prepare calculations for you if you wish.
3(a)Spica
(i)The most beneficial tax treatment of the payment received
The payment received by Spica will be treated as either an income distribution or as capital.
Income treatment
£
Payment received (8,000 x £8)64,000
Less:Original subscription price (8,000 x £1·90)(15,200)
––––––––
Distribution48,800
––––––––
T axable dividend income (£48,800 x 100/90)54,222
Less:Personal allowance(5,225)
––––––––
T axable income48,997
––––––––
Income tax
£
34,600 x 10%3,460
14,397 x 32·5%4,679
–––––––
48,997
–––––––––––––––
8,139
Less:Income tax credit (£54,222 x 10%)(5,422)
––––––––
Income tax payable2,717
––––––––
Tutorial note
A capital loss of £800 [8,000 x (£2·00 –£1·90)] will also arise. Spica cannot claim to offset this capital loss against
income as she did not subscribe for the shares.
Capital treatment
£
Sales proceeds (8,000 x £8)64,000
Less:Cost (8,000 x £2)(16,000)
––––––––
48,000
––––––––
The shares are business assets that have been owned for more than two years.
T axable gains (£48,000 x 25%)12,000
Less:Remainder of the annual exemption (£9,200 – £3,800)(5,400)
––––––––
6,600
––––––––
Capital gains tax
£
2,230 x 10%223
4,370 x 20%874
––––––
6,600
––––––––––––––
Capital gains tax payable1,097
––––––––
The capital treatment gives rise to the lower tax liability.
(ii)Ensuring capital treatment
For the capital treatment to apply, a number of conditions need to be satisfied such that the following points need to be
confirmed.
–The business of Acrux Ltd consists wholly or mainly of the carrying on of a trade as opposed to the making of investments.
–Spica is UK resident and ordinarily resident despite living in both the UK and Solaris.
–The transaction is being carried out for the purpose of the company’s trade and is not part of a scheme intended to avoid tax. This is likely to be the case as HMRC accept that a management disagreement over the running of
the company has an adverse effect on the running of the business.
I n addition, Spica must have owned the shares for at least five years so the transaction must not take place until
1 October 2008.
(b)Rate of tax on profits of non-UK resident investee companies
Undistributed profits
The companies will be subject to tax in the countries in which they are resident; this is because of their residency status or because they have a permanent establishment in that country. Undistributed profits will not be taxed in the UK.
The rate of tax on undistributed profits will therefore be the rate of tax in the country of residency of the respective companies.
Distributed profits with double tax treaty
The dividends received by Acrux Ltd from each of the overseas companies will be grossed up in respect of underlying tax (the overseas corporation tax paid on the distributed profits) because Acrux Ltd will own at least 10% of the overseas companies.
The gross amount will then be included in Acrux Ltd’s profits chargeable to corporation tax.
The treaty will provide double tax relief in the UK for the overseas tax suffered in respect of each dividend up to a maximum of the UK tax on the grossed up overseas dividend. As a result of the double tax relief, the overall rate of tax suffered will be the higher of the UK rate paid by Acrux Ltd and the overseas tax rate borne by the overseas company.
Where the rate of overseas tax in respect of a particular dividend exceeds the rate of corporation tax in the UK, excess foreign tax will arise. This can be relieved, via onshore pooling, against the UK tax due on those dividends where the rate of tax in the UK exceeds the rate overseas. This will reduce the overall rate of tax suffered on the total overseas profits of the overseas companies as a whole.
Distributed profits with no double tax treaty
Where there is no double tax treaty, unilateral double tax relief will be available in the UK. This relief will operate in the same way as double tax relief under a double tax treaty such that the overall rate of tax on each dividend will be the higher of the UK rate paid by Acrux Ltd and the overseas rate borne by the overseas company. Relief via onshore pooling will also be available.
4(a)(i)Galileo – Inheritance tax payable
The gift of shares to Galileo was a potentially exempt transfer. It has become chargeable due to Kepler’s death within
seven years of the gift.
£
Value of Kepler’s holding prior to the gift to Galileo (2,000 x £485)970,000
Less:Value of Kepler’s holding after the gift (1,400 x £310)(434,000)
–––––––––
536,000
Business property relief (W1)(367,843)
Less:Annual exemption 2004/05(3,000)
Less:Annual exemption 2003/04 (£3,000 – (£900 x 2))(1,200)
–––––––––
163,957
Available nil rate band (£300,000 –(£298,000 – £6,000)(8,000)
–––––––––
155,957
–––––––––
Inheritance tax at 40%62,383
T aper relief (3–4 years) (£62,383 x 20%)(12,477)
–––––––––
Inheritance tax payable49,906
–––––––––
The inheritance tax payable in respect of the shares in the death estate will be paid by the executors and borne by
Herschel, the residuary legatee. None of the tax will be payable by Galileo.
Workings
1Business property relief
£536,000 x 100% x (£1,050,000/£1,530,000) (W2)£367,843
2Excepted assets and total assets
££
Total Non-excepted
assets assets
Premises900,000900,000
Surplus land480,000–
Vehicles100,000100,000
Current assets50,00050,000
––––––––––––––––––––
1,530,0001,050,000
––––––––––––––––––––
(ii)Payment by instalments
The inheritance tax can be paid by instalments because Messier Ltd is an unquoted company controlled by Kepler at
the time of the gift and is still unquoted at the time of his death.
The tax is due in ten equal annual instalments starting on 30 November 2008.
Interest will be charged on any instalments paid late; otherwise the instalments will be interest free because Messier is
a trading company that does not deal in property or financial assets.
All of the outstanding inheritance tax will become payable if Galileo sells the shares in Messier Ltd.
Tutorial note
Candidates were also given credit for stating that payment by instalments is available because the shares represent at
least 10% of the company’s share capital and are valued at £20,000 or more.
(b)Minimising capital gains tax on the sale of the paintings
Galileo will become resident and ordinarily resident from the date he arrives in the UK as he intends to stay for more than three years. Prior to that date he will be neither resident nor ordinarily resident such that he will not be subject to UK capital gains tax.
Galileo should sell the paintings before he leaves Astronomeria; this will avoid UK capital gains tax completely.
Tutorial note
The gains would be taxable on the remittance basis if the paintings were sold after Galileo’s arrival in the UK. However, this would not help Galileo to minimise the capital gains tax due as he needs to bring the sales proceeds into the UK in order to purchase a house.
(c)(i)Relocation costs
Direct assistance
Messier Ltd can bear the cost of certain qualifying relocation costs of Galileo up to a maximum of £8,000 without
increasing his UK income tax liability. Qualifying costs include the legal, professional and other fees in relation to the
purchase of a house, the costs of travelling to the UK and the cost of transporting his belongings. The costs must be
incurred before the end of the tax year following the year of the relocation, i.e. by 5 April 2010.
Assistance in the form of a loan
Messier Ltd can provide Galileo with an interest-free loan of up to £5,000 without giving rise to any UK income tax.
(ii)Tax-free accommodation
It is not possible for Messier Ltd to provide Galileo with tax-free accommodation. The provision of accommodation by an
employer to an employee will give rise to a taxable benefit unless it is:
–necessary for the proper performance of the employee’s duties, e.g. a caretaker; or
–for the better performance of the employee’s duties and customary, e.g. a hotel manager; or
–part of arrangements arising out of threats to the employee’s security, e.g. a government minister.
As a manager of Messier Ltd Galileo is unable to satisfy any of the above conditions.
5(a)(i)The tax incentives immediately available
Income tax
–The investor’s income tax liability for 2008/09 will be reduced by 20% of the amount subscribed for the shares.
–Up to half of the amount invested can be treated as if paid in 2007/08 rather than 2008/09. This is subject to a maximum carryback of £50,000.
This ability to carryback relief to the previous year is useful where the investor’s income in 2008/09 is insufficient
to absorb all of the relief available.
Tutorial note
There would be no change to the income tax liability of 2007/08 where an amount is treated as if paid in that year.
This ensures that such a claim does not affect payments on account under the self assessment system. Instead, the
tax refund due is calculated by reference to 2007/08 but is deducted from the next payment of tax due from the
taxpayer or is repaid to the taxpayer.
Capital gains tax deferral
–For every £1 invested in Vostok Ltd, an investor can defer £1 of capital gain and thus, potentially, 40 pence of capital gains tax.
–The gain deferred can be in respect of the disposal of any asset.
–The shares must be subscribed for within the four year period starting one year prior to the date on which the disposal giving rise to the gain took place.
(ii)Answers to questions from potential investors
Maximum investment
–For the relief to be available, a shareholder (together with spouse and children) cannot own more than 30% of the company. Accordingly, the maximum investment by a single subscriber will be £315,000 (15,000 x £21).
Borrowing to finance the purchase
–There would normally be tax relief for the interest paid on a loan taken out to acquire shares in a close company such as Vostok Ltd. However, this relief is not available when the shares qualify for relief under the enterprise
investment scheme.
Implications of a subscriber selling the shares in Vostok Ltd
–The income tax relief will be withdrawn if the shares in Vostok Ltd are sold within three years of subscription.
–Any profit arising on the sale of the shares in Vostok Ltd on which income tax relief has been given will be exempt from capital gains tax provided the shares have been held for three years.
–Any capital loss arising on the sale of the shares will be allowable regardless of how long the shares have been held. However, the loss will be reduced by the amount of income tax relief obtained in respect of the investment.
The loss may be used to reduce the investor’s taxable income, and hence his income tax liability, for the tax year
of loss and/or the preceding tax year.
–Any gain deferred at the time of subscription will become chargeable in the year in which the shares in Vostok Ltd are sold.
(b)Recoverable input tax in respect of new premises
Vostok Ltd will recover £47,880 (£446,500 x 7/47 x 72%) in the year ending 31 March 2009.
The capital goods scheme will apply to the purchase of the building because it is to cost more than £250,000. Under the scheme, the total amount of input tax recovered reflects the use of the building over the period of ownership, up to a maximum of ten years, rather than merely the year of purchase.
Further input tax will be recovered in future years as the percentage of exempt supplies falls. (If the percentage of exempt supplies were to rise, Vostok Ltd would have to repay input tax to HMRC.)
The additional recoverable input tax will be computed by reference to the percentage of taxable supplies in each year including the year of sale. For example, if the percentage of taxable supplies in a particular subsequent year were to be 80%, the additional recoverable input tax would be computed as follows.
£446,500 x 7/47 x 1/10 x (80% – 72%) = £532.
Further input tax will be recovered in the year of sale as if Vostok Ltd’s supplies in the remaining years of the ten-year period are fully vatable. For example, if the building is sold in year seven, the additional recoverable amount for the remaining three years will be calculated as follows.
£446,500 x 7/47 x 1/10 x (100% – 72%) x 3 = £5,586.
Professional Level –Options Module, Paper P6 (UK)
Advanced Taxation (United Kingdom)June 2008 Marking Scheme
Available Maximum
1(a)(i)Identification of group members1
Identification of strategy1
Calculation of corporation tax rate limits1
Advice1
Relevance of dividend received by Saturn Ltd1
T ax saving1
Submission date for group relief claim1
Loss carryback1·5
–––––
8·57
–––––
(ii)Not in group relief group1
Recognition of condition for consortium to exist/information required2
Relief available if consortium exists1·5
Relief available if no consortium1
Possible restriction on ability to carry forward loss2
–––––
7·56
–––––
(iii)Value added tax/information required2
No balancing charge1
Capital gain1
Rollover relief:
Assets to be acquired by T ethys Ltd1·5
Amount of relief available1
Relevant assets1
Qualifying period1
–––––
8·57
–––––
(iv)Stamp duty2
–––––
22
–––––
Appropriate style and presentation1
Effectiveness of communication1
–––––
22
–––––
(b)Information needed – 1 mark each3
Action to take
Threats and safeguards2
Contact existing tax adviser1
–––––
65
––––––––Total29
–––
Available Maximum 2(a)The additional income:
Interest – 0·5 for each year1
Dividends – 0·5 for each year1
Property income0·5
Children’s interest – identification of issue1
De minimis1 John’s income tax:
2005/06:
Car benefit1
Fuel benefit0·5
T rust income1
Personal allowance0·5
Remainder of basic rate band0·5
Additional tax liability2
T ax credits1
Comparison with the tax paid by Maureen0·5
2006/07:
Car0·5
Fuel benefit0·5
T rust income0·5
Personal allowance0·5
Remainder of basic rate band0·5
Additional tax liability2
T ax credits1
Comparison with the tax paid by Maureen0·5 Maureen’s income tax:
T rading income:
Capital allowances1
2005/06 assessment1
2006/07 assessment1·5
T ax on investment income:
2005/062·5
2006/072·5 Additional capital gains tax due:
Annual exemption0·5
Additional tax1·5 T otal additional tax due0·5
–––––
28·526
–––––Clarity of presentation and use of headings1
Logical structure1
–––––
22
–––––
(b)Conditions for voluntary deregistration1
Effective date0·5
Deemed supply1
De minimis limit1
Stop charging VAT0·5
Cannot recover input tax0·5
Deductible for income tax0·5
Need to monitor turnover1
Suggestion of flat rate scheme1
Operation of the scheme2
Possible financial advantage0·5
–––––
9·58
–––––Effectiveness of communication1
–––––
11
––––––––T otal37
–––
Available Maximum 3(a)(i)Income treatment
Calculation of distribution1
Gross up by 100/900·5
Personal allowance0·5
Income tax liability1
Income tax credit0·5
Capital treatment
Capital gain1
T aper relief1
Annual exemption1
Capital gains tax liability1
Conclusion0·5
–––––
87
–––––(ii)T rading company1
Spica UK resident and ordinarily resident1
Benefit of company’s trade2
Five year ownership period1
–––––
54
–––––
(b)Undistributed profits
Profits taxed in country of residency1
Overall maximum rate1 Distributed profits with treaty
Gross up with reason1
Double tax relief is lower of UK and overseas tax1
Overall maximum rate1
Onshore pooling2 Distributed profits with no treaty
Unilateral relief1
Overall maximum rate1
–––––
96
––––––––Total17
–––
Available Maximum 4(a)(i)Fall in value1
Business property relief1·5
Annual exemptions1·5
Available nil band1·5
Inheritance tax at 40%0·5
T aper relief1
T ax due in respect of shares in death estate1
–––––
87
–––––(ii)Valid reason for payment by instalments being available1
When due1
Interest on instalments1·5
Implication of Galileo selling the shares1
–––––
4·53
–––––
(b)Residence and ordinary residence position1
Advice1
–––––
22
–––––
(c)(i)Relocation costs
T ax free with maximum1
Examples of qualifying costs (0·5 each, maximum 1)1
Deadline0·5
Interest-free loan
Maximum tax-free amount1
–––––
3·53
–––––(ii)Provision of accommodation will be taxed1
Reasons why not exempt2
–––––
32
––––––––Total17
–––
Available Maximum 5(a)(i)Income tax
Reduction in income tax1
Carry back2
Capital gains tax
Deferral1
Any asset0·5
Time period1
–––––
5·55
–––––(ii)Maximum investment1·5
Borrowing to finance the purchase1
Sale of the shares
Importance of three-year period1
Withdrawal of income tax relief1
T reatment of gain arising1
T reatment of loss arising
Allowable1
Affect on loss of income tax relief0·5
Relief of loss against income1
Gain deferred at time of subscription1
–––––
97
–––––
(b)Recoverable input tax in the year ending 31 March 20091
Additional recoverable input tax
Capital goods scheme applies1
Explanatory rationale1
Input tax recoverable in future years2
Input tax recoverable following sale2
–––––
75
––––––––Total17
–––