问答题
Simone is a partner in the firm Ellington and Co. She is seeking advice on the tax efficient use of her share of the
partnership's loss for the year ended 5 April 2012. Simone intends to establish a new business and is considering
the need to register for the purposes of value added tax (VAT).
The following information has been obtained from a meeting with Simone.
Simone's income and capital gains:
- Dividends received of ￡12,600 in the tax year 2010/11, ￡10,800 in the tax year 2011/12 and ￡nil in
subsequent years. In years prior to this, she had received dividends of ￡9,000 per annum.
- Share of profits from Ellington and Co for the year ended 5 April 2011 of ￡48,200.
- Capital gains of ￡94,000 on the sale of a portfolio of quoted shares on 1 February 2012.
Ellington and Co:
- Has been trading for many years.
- Has two partners; Ellington and Simone. A third partner, Basle, retired on 28 February 2012.
- Made a loss in the year ended 5 April 2012.
- Is budgeted to make tax adjusted trading profits of no more than ￡25,000 per year for the next few years.
- Is registered for the purposes of VAT.
Ellington and Co - results for the year ended 5 April 2012:
- The firm made a tax adjusted trading loss, before deduction of capital allowances, of ￡90,000.
- The firm purchased office equipment on 1 December 2011 for ￡21,200.
- The balance on the capital allowances main pool as at 5 April 2011 was ￡700.
Ellington and Co - profit sharing arrangements:
- From 6 April 2011 until 28 February 2012
Ellington Simone Basle
Annual salaries ￡15,000 ￡11,500 ￡13,000
Profit sharing ratio 3 : 2 : 2
- From 1 March 2012
Ellington Simone
Annual salaries ￡14,000 ￡14,000
Profit sharing ratio 1 : 1
Simone's new business:
- Simone intends to start trading on 1 September 2012.
- Taxable trading profit is budgeted to be approximately ￡1,500 per month.
- Taxable supplies are expected to be between ￡75,000 and ￡95,000 in the first year.
- Simone does not wish to register voluntarily for VAT.
Required
(a) (i) Calculate Simone's share of the tax adjusted trading loss for the year ended 5 April 2012;
(ii) State the alternative strategies available to Simone in respect of her share of the taxable trading loss
for the year ended 5 April 2012;
(iii) Explain, using supporting calculations where necessary, which of the strategies will save the most tax
and calculate the total tax saved via the operation of this strategy.
Note: your calculations should be based on the assumption that the tax rates and allowances for the
year 2011/12 apply to all relevant years.
(b) Explain when Simone would be required to register and to start charging her customers VAT and, in relation
to this, comment on the relevance of Ellington and Co being VAT registered.
Note: you are not required to prepare calculations for part (b) of this question.
partnership's loss for the year ended 5 April 2012. Simone intends to establish a new business and is considering
the need to register for the purposes of value added tax (VAT).
The following information has been obtained from a meeting with Simone.
Simone's income and capital gains:
- Dividends received of ￡12,600 in the tax year 2010/11, ￡10,800 in the tax year 2011/12 and ￡nil in
subsequent years. In years prior to this, she had received dividends of ￡9,000 per annum.
- Share of profits from Ellington and Co for the year ended 5 April 2011 of ￡48,200.
- Capital gains of ￡94,000 on the sale of a portfolio of quoted shares on 1 February 2012.
Ellington and Co:
- Has been trading for many years.
- Has two partners; Ellington and Simone. A third partner, Basle, retired on 28 February 2012.
- Made a loss in the year ended 5 April 2012.
- Is budgeted to make tax adjusted trading profits of no more than ￡25,000 per year for the next few years.
- Is registered for the purposes of VAT.
Ellington and Co - results for the year ended 5 April 2012:
- The firm made a tax adjusted trading loss, before deduction of capital allowances, of ￡90,000.
- The firm purchased office equipment on 1 December 2011 for ￡21,200.
- The balance on the capital allowances main pool as at 5 April 2011 was ￡700.
Ellington and Co - profit sharing arrangements:
- From 6 April 2011 until 28 February 2012
Ellington Simone Basle
Annual salaries ￡15,000 ￡11,500 ￡13,000
Profit sharing ratio 3 : 2 : 2
- From 1 March 2012
Ellington Simone
Annual salaries ￡14,000 ￡14,000
Profit sharing ratio 1 : 1
Simone's new business:
- Simone intends to start trading on 1 September 2012.
- Taxable trading profit is budgeted to be approximately ￡1,500 per month.
- Taxable supplies are expected to be between ￡75,000 and ￡95,000 in the first year.
- Simone does not wish to register voluntarily for VAT.
Required
(a) (i) Calculate Simone's share of the tax adjusted trading loss for the year ended 5 April 2012;
(ii) State the alternative strategies available to Simone in respect of her share of the taxable trading loss
for the year ended 5 April 2012;
(iii) Explain, using supporting calculations where necessary, which of the strategies will save the most tax
and calculate the total tax saved via the operation of this strategy.
Note: your calculations should be based on the assumption that the tax rates and allowances for the
year 2011/12 apply to all relevant years.
(b) Explain when Simone would be required to register and to start charging her customers VAT and, in relation
to this, comment on the relevance of Ellington and Co being VAT registered.
Note: you are not required to prepare calculations for part (b) of this question.
【正确答案】Text references. Capital allowances are covered in Chapter 7, trading losses in Chapter 8 and partnerships in
Chapter 9.
Top lips. Use a proforma to calculate the share of the loss for each partner.
Easy marks. The calculation of capital allowances should have been an easy marks.
Examiner's comments. In part (a) the calculation of the capital allowances was done well. However, the allocation
of the loss between the partners was done poorly with the majority of candidates treating the salaries as
employment income rather than as a share of the trading loss. The use of the loss was also problematic. Weaker
candidates were confused as to corporate and personal loss offset rules. Even many stronger candidates Lacked the
precise knowledge required to score well; a statement of how losses can be used must describe precisely the
income against which the loss can be offset, for example, 'against future profits of the same trade' in order to earn
all of the marks available. Many candidates ignored the requirement to calculate the total tax saved and simply
prepared various income tax computations. In part (b) weaker candidates wasted time describing the future test in
detail despite it not being relevant to this particular question. In addition, many candidates lacked precise
knowledge (for example in relation to the date registration comes into effect) such that they did not score as well as
would have been expected.
Chapter 9.
Top lips. Use a proforma to calculate the share of the loss for each partner.
Easy marks. The calculation of capital allowances should have been an easy marks.
Examiner's comments. In part (a) the calculation of the capital allowances was done well. However, the allocation
of the loss between the partners was done poorly with the majority of candidates treating the salaries as
employment income rather than as a share of the trading loss. The use of the loss was also problematic. Weaker
candidates were confused as to corporate and personal loss offset rules. Even many stronger candidates Lacked the
precise knowledge required to score well; a statement of how losses can be used must describe precisely the
income against which the loss can be offset, for example, 'against future profits of the same trade' in order to earn
all of the marks available. Many candidates ignored the requirement to calculate the total tax saved and simply
prepared various income tax computations. In part (b) weaker candidates wasted time describing the future test in
detail despite it not being relevant to this particular question. In addition, many candidates lacked precise
knowledge (for example in relation to the date registration comes into effect) such that they did not score as well as
would have been expected.
【答案解析】