ACCA F6 FA09 Study Text 2010

Подождите немного. Документ загружается.

Answers to practice questions

W2: Car expenses £

Colin’s car expenses: ½ × £3,400

1,700

Add to profit the private % of these expenses: £1,700 × 20% 340

7 Ashley and Cheryl

(a) Capital allowances, 7 months ended 31 January 2010

Main pool

Total

allowances

£ £

Acquisitions not qualifying for AIAs

Car for manager

WDA: (£11,000 × 20% × 7/12)

11,000

(1,283) 1,283

–

–––––

–

––––––––––––––––––––––––––––

9,717

Additions qualifying for AIA

Production line 140,000

AIA (50,000 × 7/12)

(29,167)

29,167

–

–––––

–

––––––––––––––––––––––––––

–

110,833

FYA (110,833 x 40%) (44,333) 66,500 44,333

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––––

TWDV c/f

76,217

–

–––––

–

––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––

–

Total allowances

74,783

–––––––––––––––––––––––––––––––––

–

Notes

(1) The private use of the car by the sales manager is irrelevant. The sales

manager will be assessed on the private use of his company car in his

income tax computation. As the car’s CO

emissions are between 111

and 160 g/km, it is put in the main pool.

(2) The automotive production line is not a long-life asset as it has an

estimated useful life of less than 25 years.

(b) Capital allowances computation – y/e 31 March 2010

Main

pool

Jaguar

car

Short-life

asset

Total

allowances

£ £ £ £ £

TWDV b/

113,420 22,880 3,410

Additions

ualif

for AIAs

IT e

ment 7,370

AIA (7,370) Nil 7,370

–

–––––

–

–––––––––––––––––––

–

––––––

–

Additions not

ualif

for AIAs

Renault car 11,000

Dis

osals –

Lower of cost or sale

roceeds (36,960) (500)

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––––

124,420 (14,080) 2,910

Paper F6 (UK): Taxation FA2009

466 Go to www.emilewoolfpublishing.com for Q/As, Notes & Study Guides © EWP

Main

pool

Jaguar

car

Short-life

asset

Total

allowances

Balancin

char

e 14,080 (14,080)

–

–––––

–

––––––––––––––––––––––––––––

Balancin

allowance (2,910) 2,910

–––––––––––––––––––––––––––––––––––

WDA (20%) (24,884) 24,884

–

–––––

–

––––––––––––––––––––––––––

–

TWDV c/

99,536

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––

–

Total allowances 21,084

–

–––––

–

––––––––––––––––––––––––––

–

8 Daniel

Daniel: computation of adjusted profits after capital allowances

15 month period ending 30 June 2010

Net profit 94,500

Add

Depreciation 10,000

Motor expenses (25% × £3,750) 937

Fine for breach of health regulations 5,000

Computer software (capital) 2,100

Premium for granting of lease (capital) 6,000

–––––––––––––––––––––––––––––––––

–

118,537

Minus

Building society interest (2,000)

Rental income (6,000)

Allowable deduction for short lease (98)

–––––––––––––––––––––––––––––––––

–

Adjusted profit before capital allowances 110,439

Minus

Capital allowances (W3) (63,550)

–––––––––––––––––––––––––––––––––

–

Adjusted profit after capital allowances 46,889

–––––––––––––––––––––––––––––––––

–

Notes

(1) The computer software is disallowable capital expenditure. However, capital

allowances are available on the cost of the software with the cost of the new

computer system.

(2) The premium paid to purchase the leasehold interest is disallowable capital

expenditure. However, an annual allowance is available for part of the cost of

the lease if the building is used for the purpose of Daniel’s trade.

Workings

W1: Allowable deduction for short lease

Premium paid

6,000

Minus: 2% × £6,000 × 11 years (1,320)

–––––––––––––––––––––––––––––––

Property income assessment on E Ltd 4,680

––––––––––––––––––––––––

–

––––––

Annual allowable deduction for Daniel (£4,680 ÷ 12 years) £390

–––––––––––––––––––––––––––––––

Answers to practice questions

Daniel owned the leasehold interest for 3 months in the accounting period.

Therefore the allowable deduction for the period ending 30 June 2009 is:

£390 × 3/12 = £98.

Note

The allowable deduction is apportioned by 3/12 because the figure of £390 is the

annual (i.e. 12 month) deduction.

W2: Capital allowances

Main

pool

P/U car 1

P/U car 2

Total

allowances

£ £ £

TWDV b/f

78,000 6,400

Additions qualifying for FYA

Computer system

15,000

Software

2,100

Plant and machinery

28,000

––––––

–

––––––––––––––––––––––––––

–

45,100

AIA

(45,100) Nil

45,100

––––––

–

––––––––––––––––––––––––––

–

Additions not qualifying for FYA

16,000

Disposals

(9,800)

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––––

78,000 (3,400) 16,000

–

–––––

–

––––––––––––––––––––––––––

–

× 75%

(2,550)

WDA: 15/12 × 20%

(19,500)

19,500

WDA: 15/12 × 10%

(2,000) × 75%

1,500

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––––

TWDV c/f

58,500

14,000

–

–––––

–

––––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––

–

Total allowances

63,550

–––––––––––––––––––––––––––––––––

–

Notes

(1) The computer system and software have an expected useful life of three years.

However, it is not beneficial to make a short-life asset election as their cost is

fully covered by the AIA.

(2) The accounting period is more than 12 months. The WDA must therefore be

adjusted by × 15/12 to allow for the 15-month accounting period.

Paper F6 (UK): Taxation FA2009

468 Go to www.emilewoolfpublishing.com for Q/As, Notes & Study Guides © EWP

9 Industrial building

ST Ltd: Industrial buildings allowances

Qualifying cost

Building

Manufacturing area

Allowable 169,000

Warehouse

Allowable 42,000

Showroom

See working below 4,000

Drawing office

Allowable 2,000

Canteen

Allowable 3,000

Accounts office

See working below 19,000

Land

Not allowable Nil

Site preparation

Allowable 1,000

240,000

Working

25% × Total cost of all buildings on the site (excluding land)

= 25% × (£300,000 – £60,000) = £60,000

Cost of showroom and accounts office = (£4,000 + £19,000) = £23,000.

Therefore costs of showroom and accounts office qualify.

Allowances

Allowances claimed

/e 31 March 2009

WDA (3% x 240,000) 7,200

/e 31 March 2010

WDA (2% × £240,000) 4,800

/e 31 March 2011

No allowances due as not in use at end of accounting period.

No balancing charge as building disposed of after 21 March 2007.

10 Hannah

(a) Trade starts: 1 May 2007. This is in the tax year 2007/08

Tax year

Basis of

assessment

Basis period

Workings

Trading

income

assessment

2007/08 Actual 1.5.07– 5.4.2008 11/16 × £60,000 41,250

2008/09 12 months

ending in 2

year

1.9.2007 – 31.8.2008 12/16 × £60,000 45,000

Answers to practice questions

Tax year

Basis of

assessment

Basis period

Workings

Trading

income

assessment

2009/10 12 months

ending in 3

year

Year ended 31.8.2009

84,000

2010/110 CYB Year ended 31.8.2010

90,000

Overlap

profits

1.9.2007 – 5.4.2008

7/16 × £60,000 26,250

(b) Trade ceases: 30 April 2011. This is in the tax year 2011/12

Penultimate tax year = 2010/11: CYB year ended 31.8.2010

90,000

–––––––––––––––––––––––––––––––––

–

Final tax year = 2011/12

Profits not yet assessed

70,000

Minus: Overlap profits

(26,250)

–––––––––––––––––––––––––––––––––

–

Closing year trading income assessment 43,750

–––––––––––––––––––––––––––––––––

–

11 Ian

(a) Trade starts: 1 February 2006. This is in the tax year 2005/06

Tax year of change = Earlier of the first tax year when the accounts are:

(1) prepared to the new accounting date (i.e. 2009/10), and

(2) not prepared to the old accounting date (i.e. also 2009/10).

Tax year

Basis of

assessment

Basis period

Workings

(nearest

month)

Trading

income

assessment

2005/06 Actual 1.2.2006 – 5.4.2006 2/4 × £8,280 4,140

2006/07 First 12

months

trading

1.2.2006 – 31.1.2007 £8,280 + (8/12

× £10,440)

15,240

2007/08 12 months

ending in third

year

y/e 31.5.2007

10,440

2008/09 CYB y/e 31.5.2008

38,840

2009/10 See working

53,385

2010/11 CYB y/e 30.9.2010

61,030

Overlap profits

Opening years

1.2.2006 – 5.4.2006 (2/4 × £8,280) 4,140

1.6.2006 – 31.1.2007

(8/12 × £10,440) 6,960

–––––––––––––––––––––––––––––––

11,100

On change of accounting date: amount relieved

(4,440)

–––––––––––––––––––––––––––––––

Overlap profits to carry forward

6,660

–––––––––––––––––––––––––––––––

Paper F6 (UK): Taxation FA2009

470 Go to www.emilewoolfpublishing.com for Q/As, Notes & Study Guides © EWP

Note

The overlap profits in the opening years = 10 months’ profits.

Working

Gap period = 1.6.2008 – 30.9.2009

Gap period is more than 12 months. Assess the profits of the gap period and

deduct overlap relief.

Profits of the gap period (1.6.2008 – 30.9.2009)

57,825

Minus: Overlap relief £11,100 × (16 – 12)/10

(4,440)

–––––––––––––––––––––––––––––

53,385

–––––––––––––––––––––––––––––

(b) Ceased to trade: 31 January 2012. This is in the tax year 2011/12

Penultimate tax year = 2010/11: CYB year ended 30.9.2010

61,030

–––––––––––––––––––––––––––––––––

–

Final tax year = 2011/12

Profits not yet assessed

Year ending 30.9.2011

46,120

Period ending 31.1.2012

10,100

–––––––––––––––––––––––––––––––––

–

56,220

Minus: Overlap profits

(6,660)

–––––––––––––––––––––––––––––––––

–

Closing year trading income assessment 49,560

–––––––––––––––––––––––––––––––––

–

12 Trading loss

Year ended

Basis of assessment

Tax year

Trading income

assessment

31 May 2007 CYB 2007/08 8,200

31 May 2008 CYB 2008/09 6,600

31 May 2009 CYB 2009/10 Nil

31 May 2010 CYB 2010/11 6,800

2009/10 is the tax year of the loss.

Martin: Income tax computations

2007/08 2008/09 2009/10 2010/11

£ £ £ £

Tradin

income 8,200

6,600 Nil 6,800

Minus: Additional loss relie

(2,310)

Nil Nil Nil

–

––––

–

––––––––––––––––––––––

–

–––––

–

–––––––––––––––––

–

––––

–

–––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

5,890

6,600 Nil 6,800

Dividend income 600

600 600 500

–

––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

6,490

7,200 600 7,300

Allowable interest (100)

(100) (100) (100)

–

––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

Total income before relie

6,390

7,100 500 7,200

Answers to practice questions

Martin: Income tax computations

2007/08 2008/09 2009/10 2010/11

Minus: s64 loss relie

(7,100) - -

–

––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

6,390

Nil 500 7,200

PA (6,390)

(wasted) (500) (6,475)

–

––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–

––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

Taxable income Nil

Nil Nil 725

–

––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

–––––––––––––––––––––––––––––

Record of trading losses

2009/10

Tradin

loss in tax

ear 9,410

S64 loss relief claimed

- in 2008/09 (7,100)

–

–––––

–

––––––––––––––––––––––––

2,310

Additional loss relief in 2007/08 (2,310)

–

–––––

–

––––––––––––––––––––––––

Carried forward

Nil

–

–––––

–

––––––––––––––––––––––––

Note

No s64 claim would be made in 2009/10 as the income is covered by the personal

allowance.

13 Loss relief in the opening years

(a) Trade starts: 1 July 2009. This is in the tax year 2009/10.

Tax

year

Basis of

assessment

Basis period

Workings

(nearest month)

Trading

income to

assess

£ £

2009/10

Actual

1.7.2009 –

5.4.2010

9/12 × £28,800 loss (21,600)

Nil

2010/11

12 months

ending in 2

year

Year ended

30.6.2010

Loss in period (28,800)

Loss already used

in calculation

21,600

–––––––––––––––––––––––––––––––––––

(7,200)

Nil

–––––––––––––––––––––––––––––––––––

2011/12

12 months

ending in 3

year

Year ended

30.6.2011

6,000 6,000

(b) Loss relief available

Tax year of loss

Amount

of loss

Loss relief available against total income

Under s64 in: Under s72 in:

2009/10 21,600 1. 2009/10 and/or 1. 2006/07 and then

2. 2008/09 2. 2007/08 and then

- in either order 3. 2008/09

- in that strict order

Paper F6 (UK): Taxation FA2009

472 Go to www.emilewoolfpublishing.com for Q/As, Notes & Study Guides © EWP

Tax year of loss

Amount

of loss

Loss relief available against total income

2010/11 7,200 1. 2010/11 and/or 1. 2007/08 and then

2. 2009/10 2. 2008/09 and then

- in either order 3. 2009/10

- in that strict order

28,800

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

£ £ £ £ £ £

Trading

income

Nil Nil 6,000

Minus: s83 trading loss b/f

(Nil) (Nil) (Nil)

–

–––––

–

––––––––––––––––––––––

––––––––––––––––––––––––––––––

Nil Nil 6,000

Employment

income

22,848 26,520 14,083

Other income

9,600 9,600 9,600 9,600 9,600 9,600

––––––––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

––––––––––––––––––––––––––––––

Total income

before loss

relief

32,448 36,120 23,683 9,600 9,600 15,600

s72 relief

- 2009/10 loss

(21,600)

- 2010/11 loss

(7,200)

––––––––––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

––––––––––––––––––––––––––––––

Total income

after losses

10,848 28,920 23,683 9,600 9,600 15,600

(6,475) (6,475) (6,475) (6,475) (6,475) (6,475)

––––––––––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

––––––––––––––––––––––––––––––

4,373 22,445 17,208 3,125 3,125 9,125

––––––––––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

–––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––

––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––

–

––

14 Terminal loss relief

Oscar: income tax computations

2006/07 2007/08 2008/09 2009/10 2010/11

£ £ £ £ £

Trading income (W1)

40,000 33,000 20,000 Nil Nil

Minus: terminal loss

- (Nil) (19,700) ( Nil) ( Nil)

–

–––––

–

––––––––––––––––––––––––

–

––

–

––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

–––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––

–

40,000 33,000 300 Nil Nil

Dividend income

(£261 × 100/90)

290 290 290 290 290

–

–––––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

–––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––

–

40,290 33,290 590 290 290

Allowable interest

(300) (300) (300) (300) (300)

–

–––––

–

––––––––––––––––––––––––

–

–––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

–––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––

–

39,990 32,990 290 Nil Nil

(6,475) (6,475) (290) (wasted) (wasted)

–

–––––

–

––––––––––––––––––––––––

–

–––––

–

––––––––

–

–––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

––––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––

–

33,515 26,515 Nil Nil Nil

–

–––––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

–––––

–

––––––––––––––––––––––––

–

––––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––

–

Answers to practice questions

Workings

(W1) Trading income assessment

Ceased to trade: 30 June 2010. This is in the tax year 2010/11.

Final tax year = 2010/11

Profits not yet assessed

Period ending 30 June 2010

5,000

Minus: Overlap profits

(6,200)

–––––––––––––––––––––––––––––––––

Net loss (1,200)

–––––––––––––––––––––––––––––––––

Final tax year assessment Nil

–––––––––––––––––––––––––––––––––

(W2) Terminal loss

£ £

Overlap profits not yet relieved

6,200

Last tax year

Actual loss (6.4.2010 – 30.6.2010): 3/6 × £5,000 profit - ignore

Nil

12 months before cessation to 5 April before cessation

1.7.2009 to 5.4.2010 = 9 months

Actual loss

Period 1.7.2009 – 31.12.2009: (6/12 × £32,000 loss)

(16,000)

Period 1.1.2010 – 5.4.2010: (3/6 × £5,000 profit)

2,500

–

––––––––––––––––––––––––––––––––––

Net loss

(13,500) 13,500

–

––––––––––––––––––––––––––––––––––

–––––––––––––––––––––––––––––––––

–

Terminal loss of last 12 months trading

19,700

–––––––––––––––––––––––––––––––––

–

This loss is carried back against trading income on a LIFO basis. Therefore all

£19,700 will be relieved in 2008/09 against the trading income of £20,000.

15 Partnership profit

Partnership allocation: year ending 31 December 2009

Total

Eric

Fred

George

4 months to 30 A

ril 2009

Balance of

rofits (3:2:1) 20,000 10,000 6,667 3,333

(4/12 × £60,000)

8 months to 31 December 2009

Salar

(£20,000 × 8/12) 13,333 13,333

Balance of

rofits (2:2:1) 26,667 10,667 10,667 5,333

40,000 24,000 10,667 5,333

12 months to 31 December 2009

Total

rofit allocation 60,000 34,000 17,334 8,666

Paper F6 (UK): Taxation FA2009

16 Change in partnership

Allocation of partnership profits

Total

Jacob

Ken Lesley

Mike

Year to 30 June 2008

Profits shared equally 24,000

8,000

Year to 30 June 2009

Profits shared equally

1.7.2008 – 31.1.2009 18,900

6,300

(7/12 × £32,400)

1.2.2009 – 30.6.2009

(5/12 × £32,400) 13,500

4,500

32,400

10,800

6,300

10,800

4,500

Year to 30 June 2010

Profits shared equally 43,200

14,400

Trading income assessments of Jacob and Lesley (continuing partners)

Tax year

Basis of

assessment

Trading income

assessment

2008/09 CYB y/e 30.6.2008 8,000

2009/10 CYB y/e 30.6.2009 10,800

2010/11 CYB y/e 30.6.2010 14,400

Trading income assessments of Mike (new partner)

Share of profits: 5 months to 30.6.2009 4,500

y/e 30.6.2010 14,400

Started to trade: 1 February 2009. This is in the tax year 2008/09

Tax year

Basis of

assessment

Basis period

Workings

(nearest month)

Trading income

assessment

2008/09 Actual 1.2.2009 – 5.4.2009 2/5 × £4,500 1,800

2009/10 First 12 months

trading

1.2.2009 – 31.1.2010

£4,500 +

(7/12 × £14,400)

12,900

2010/11 12 months ending

in 3

year

Year ended

30.6.2010

14,400

Mike’s overlap profits

Opening years

1.2.2009 – 5.4.2009 (2/5 × £4,500) 1,800

1.7.2009 – 31.1.2010 (7/12 × £14,400) 8,400

10,200