问答题
You have received the following email from your manager, Kara Weddell.
From: Kara Weddell
Date: 3 December 2012
To: Tax senior
Subject: Banda Ross
I've put a copy of a letter from a potential new client, Banda Ross, on your desk. I've arranged a meeting with Banda
for Friday this week to discuss the most appropriate structure for her new business, 'Aral'.
I spoke to Banda yesterday and obtained the following additional information.
· Banda has owned the whole of the ordinary share capital of Flores Ltd since 1 January 2009.
· Flores Ltd pays Banda a salary of ￡12,700 per annum and pays dividends to her of ￡20,250 on 31 July each year.
· Banda does not intend to take any income from Aral until the tax year 2015/16 at the earliest.
· Flores Ltd is Banda's only source of income.
Banda also mentioned that Flores Ltd made some sort of 'informal loan' to her in 2009 of ￡21,000 to pay for
improvements to her house. I decided not to press her about this over the phone but I need to discuss with her
what she meant by 'informal' and whether or not the loan has been disclosed to HM Revenue and Customs.
Please prepare the following schedules for me to use as a basis for our discussions. I will give Banda copies of
schedules (a) and (b) but not schedule (c), as some of its contents may be sensitive.
(a) Calculations of the anticipated tax adjusted trading profit/loss of Aral for its first three trading periods.
(b) Explanations, together with relevant supporting calculations, of the tax relief available in respect of the
anticipated trading losses depending on whether the business is run as a sole trader or a limited company.
When considering the use of a limited company, don't forget that it could be owned by Banda or by Flores
Ltd.
Please include a recommendation based on your figures but do not address any other issues regarding the
differences between trading as a sole trader and as a company; I just want to focus on the losses for the
moment.
(c) Explanatory notes of the tax implications of there being a loan from Flores Ltd to Banda and whether or not
such a loan might affect our willingness to provide her with tax advice.
Take some time to think about your approach to this before you start; I want you to avoid preparing any
unnecessary calculations and to keep the schedules brief.
Thank you
Kara
The letter referred to in Kara's email is set out below.
Dear Kara
Aral business
I am the managing director of Flores Ltd, a company that manufactures waterskiing equipment. I am looking for a
tax adviser to help me with my next business venture.
When I began the Flores business in 2007 it was expected to make losses for the first year or so. I was advised not
to form a company but to trade as a sole trader and to offset the losses against my income of earlier years. I
followed that advice and transferred the business to Flores Ltd on 1 January 2009, once it had become profitable.
Flores Ltd has made taxable trading profits of approximately ￡120,000 each year since it was formed. It prepares
accounts to 30 June each year.
For the past few months I have been researching the windsurfing market. I must have spent at least ￡6,000
travelling around the UK visiting retailers and windsurfing clubs (half of which was spent on buying people lunch!).
However, it was all worth while as on 1 January 2013 I intend to start a new business, 'Arar, manufacturing
windsurfing equipment.
The budgeted results for the first three trading periods of the Aral business are set out below:
￡
6 months ending 30 June 2013 Trading loss (12,500)
Year ending 30 June 2014 Trading loss (13,0001)
Year ending 30 June 2015 Trading profit 77,000
The next decision I need to make is whether the new business should trade as a company or as an unincorporated
entity. It would make more sense commercially to form a company immediately but I would be willing to use the
same approach as I used when establishing the Flores business if this maximises the relief obtained in respect of
the trading losses. I want to obtain relief for the losses now; I do not want the losses carried forward for relief in the
future unless there are no other options available.
Yours sincerely
Banda
Required
Prepare the schedules requested by Kara.
Marks are available for the three schedules as follows:
(a) Tax adjusted trading profit/loss of the new business (Aral) for its first three trading periods.
(b) The tax relief available in respect of the anticipated trading losses, together with supporting calculations and
a recommended structure for the business.
(c) Explanatory notes, together with relevant supporting calculations, in connection with the loan.
Additional marks will be awarded for the appropriateness of the format and presentation of the schedules, the
effectiveness with which the information is communicated and the extent to which the schedules are structured in a
logical manner.
Notes:
1 You should assume that the rules, rates and allowances for the tax year 2011/12 and for the Financial Year
to 31 March 2012 apply throughout the question.
2 You should ignore value added tax (VAT).
From: Kara Weddell
Date: 3 December 2012
To: Tax senior
Subject: Banda Ross
I've put a copy of a letter from a potential new client, Banda Ross, on your desk. I've arranged a meeting with Banda
for Friday this week to discuss the most appropriate structure for her new business, 'Aral'.
I spoke to Banda yesterday and obtained the following additional information.
· Banda has owned the whole of the ordinary share capital of Flores Ltd since 1 January 2009.
· Flores Ltd pays Banda a salary of ￡12,700 per annum and pays dividends to her of ￡20,250 on 31 July each year.
· Banda does not intend to take any income from Aral until the tax year 2015/16 at the earliest.
· Flores Ltd is Banda's only source of income.
Banda also mentioned that Flores Ltd made some sort of 'informal loan' to her in 2009 of ￡21,000 to pay for
improvements to her house. I decided not to press her about this over the phone but I need to discuss with her
what she meant by 'informal' and whether or not the loan has been disclosed to HM Revenue and Customs.
Please prepare the following schedules for me to use as a basis for our discussions. I will give Banda copies of
schedules (a) and (b) but not schedule (c), as some of its contents may be sensitive.
(a) Calculations of the anticipated tax adjusted trading profit/loss of Aral for its first three trading periods.
(b) Explanations, together with relevant supporting calculations, of the tax relief available in respect of the
anticipated trading losses depending on whether the business is run as a sole trader or a limited company.
When considering the use of a limited company, don't forget that it could be owned by Banda or by Flores
Ltd.
Please include a recommendation based on your figures but do not address any other issues regarding the
differences between trading as a sole trader and as a company; I just want to focus on the losses for the
moment.
(c) Explanatory notes of the tax implications of there being a loan from Flores Ltd to Banda and whether or not
such a loan might affect our willingness to provide her with tax advice.
Take some time to think about your approach to this before you start; I want you to avoid preparing any
unnecessary calculations and to keep the schedules brief.
Thank you
Kara
The letter referred to in Kara's email is set out below.
Dear Kara
Aral business
I am the managing director of Flores Ltd, a company that manufactures waterskiing equipment. I am looking for a
tax adviser to help me with my next business venture.
When I began the Flores business in 2007 it was expected to make losses for the first year or so. I was advised not
to form a company but to trade as a sole trader and to offset the losses against my income of earlier years. I
followed that advice and transferred the business to Flores Ltd on 1 January 2009, once it had become profitable.
Flores Ltd has made taxable trading profits of approximately ￡120,000 each year since it was formed. It prepares
accounts to 30 June each year.
For the past few months I have been researching the windsurfing market. I must have spent at least ￡6,000
travelling around the UK visiting retailers and windsurfing clubs (half of which was spent on buying people lunch!).
However, it was all worth while as on 1 January 2013 I intend to start a new business, 'Arar, manufacturing
windsurfing equipment.
The budgeted results for the first three trading periods of the Aral business are set out below:
￡
6 months ending 30 June 2013 Trading loss (12,500)
Year ending 30 June 2014 Trading loss (13,0001)
Year ending 30 June 2015 Trading profit 77,000
The next decision I need to make is whether the new business should trade as a company or as an unincorporated
entity. It would make more sense commercially to form a company immediately but I would be willing to use the
same approach as I used when establishing the Flores business if this maximises the relief obtained in respect of
the trading losses. I want to obtain relief for the losses now; I do not want the losses carried forward for relief in the
future unless there are no other options available.
Yours sincerely
Banda
Required
Prepare the schedules requested by Kara.
Marks are available for the three schedules as follows:
(a) Tax adjusted trading profit/loss of the new business (Aral) for its first three trading periods.
(b) The tax relief available in respect of the anticipated trading losses, together with supporting calculations and
a recommended structure for the business.
(c) Explanatory notes, together with relevant supporting calculations, in connection with the loan.
Additional marks will be awarded for the appropriateness of the format and presentation of the schedules, the
effectiveness with which the information is communicated and the extent to which the schedules are structured in a
logical manner.
Notes:
1 You should assume that the rules, rates and allowances for the tax year 2011/12 and for the Financial Year
to 31 March 2012 apply throughout the question.
2 You should ignore value added tax (VAT).
【正确答案】Text references. Chapters 6 and 7 deal with computation of trading profits and capital allowances. Losses for a
sole trader are covered in Chapter 8. Corporation tax losses are dealt with in Chapter 24 and group relief in Chapter
26. Close companies are covered in Chapter 25 and taxable employment benefits in Chapter 4. Ethics are covered in
Chapter 30.
Top tips. It was very important to follow the order of the schedules set out in the question. You needed to calculate
the losses available for relief in part (a) first and then apply loss relief in part (b).
Easy marks. The calculation of the losses and profits and the application of basis periods to tax years was
knowledge that you should have been familiar with from the F6 syllabus. You should also have been able to state
some basic rules on loss relief.
Examiner's comments. Part (b), representing almost half of the question, required candidates to determine the tax
relief available in respect of the anticipated trading losses depending on the legal structure of the venture. This
necessitated some clear thinking, ideally communicated to the examiner via the use of subheadings, such that a
distinction was drawn between operating as an unincorporated trader and operating as a company. In many cases
there was little evidence of such thinking taking place.
The majority of candidates either ignored the opening year rules for the unincorporated trader or failed to apply
them to the situation. To be fair this was a relatively tricky situation due to the presence of the losses but it did
seem as though many candidates had forgotten the basic rules governing the taxation of an unincorporated trader.
In order to calculate the potential tax relief it was necessary to determine the taxpayer's income tax liability for the
years in which loss relief was available. Candidates had no problems calculating the income but were unsure how to
proceed from there. In particular there was a lack of thought with many candidates performing calculations for all
years rather than recognising that the income was the same in each year such that only one calculation was
necessary.
Answers improved when considering the position of a company but there was a lack of precision when describing
the loss reliefs available. There was also some confusion as to whether group relief would be available if the two
companies were owned personally by the individual taxpayer (it wouldn't). Finally, there was a general
unwillingness to satisfy the requirement and calculate the 'tax relief available'.
The final part of the question concerned a loan from a close company to a participator. Candidates did well in
identifying the tax implications of the loan but many ignored the ethical considerations inherent within the question.
sole trader are covered in Chapter 8. Corporation tax losses are dealt with in Chapter 24 and group relief in Chapter
26. Close companies are covered in Chapter 25 and taxable employment benefits in Chapter 4. Ethics are covered in
Chapter 30.
Top tips. It was very important to follow the order of the schedules set out in the question. You needed to calculate
the losses available for relief in part (a) first and then apply loss relief in part (b).
Easy marks. The calculation of the losses and profits and the application of basis periods to tax years was
knowledge that you should have been familiar with from the F6 syllabus. You should also have been able to state
some basic rules on loss relief.
Examiner's comments. Part (b), representing almost half of the question, required candidates to determine the tax
relief available in respect of the anticipated trading losses depending on the legal structure of the venture. This
necessitated some clear thinking, ideally communicated to the examiner via the use of subheadings, such that a
distinction was drawn between operating as an unincorporated trader and operating as a company. In many cases
there was little evidence of such thinking taking place.
The majority of candidates either ignored the opening year rules for the unincorporated trader or failed to apply
them to the situation. To be fair this was a relatively tricky situation due to the presence of the losses but it did
seem as though many candidates had forgotten the basic rules governing the taxation of an unincorporated trader.
In order to calculate the potential tax relief it was necessary to determine the taxpayer's income tax liability for the
years in which loss relief was available. Candidates had no problems calculating the income but were unsure how to
proceed from there. In particular there was a lack of thought with many candidates performing calculations for all
years rather than recognising that the income was the same in each year such that only one calculation was
necessary.
Answers improved when considering the position of a company but there was a lack of precision when describing
the loss reliefs available. There was also some confusion as to whether group relief would be available if the two
companies were owned personally by the individual taxpayer (it wouldn't). Finally, there was a general
unwillingness to satisfy the requirement and calculate the 'tax relief available'.
The final part of the question concerned a loan from a close company to a participator. Candidates did well in
identifying the tax implications of the loan but many ignored the ethical considerations inherent within the question.
【答案解析】