问答题
Ava has not yet submitted her income tax return for the tax year 2011/12. She also requires advice on the capital
gains tax and inheritance tax implications of making a gift of a farm to her nephew.
The following information has been obtained from a letter from Ava and from her client file.
Ava's personal circumstances:
- Ava is 84 years old.
- Ava's husband, Butt, died on 1 November 2013 after a long and serious illness.
- Ava has no children.
Ava's income tax reporting:
- Burt had always looked after Ava's tax affairs as well as his own.
- Ava has recently realised that her income tax return for the tax year 2011/12 has not been submitted.
- The notice to file the income tax return for the tax year 2011/12 was sent to Ava on 1 May 2012.
Bud's will and lifetime gifts:
- Burt made no transfers for the purposes of inheritance tax during his lifetime.
- Butt left quoted shares worth ￡293,000 to his sister.
- Butt left 'Hayworth', a small farm, and the residue of his estate to Ava.
- Consequently, his chargeable death estate was less than his nil rate band.
Ava's lifetime gifts:
- Ava made a gift of quoted company shares (all minority holdings) worth ￡251,000 to her niece on 1
December 2012.
- Ava intends to gift Hayworth Farm to her nephew on 1 February 2014.
- Capital gains tax gift relief will not be claimed in respect of the intended gift.
- Ava is a higher rate taxpayer.
Hayworth Farm:
- Is situated in the UK.
- Was purchased by Burt on 1 January 2004 for ￡330,000.
- Was leased to tenant farmers on 1 January 2005 and was never farmed by Burt.
- Will continue to be leased to and farmed by the tenant farmers in the future.
Hayworth Farm - Valuations of farm buildings and surrounding land:
1 November 2013 1 February 2014
￡ ￡
Market value 494,000 650,000
Agricultural value 300,000 445,000
- It can be assumed that both values will increase by 5% per year from 1 February 2014.
Required
(a) State by when Ava's 2011/12 income tax return should have been submitted and list the consequences of
submitting the return, together with Ava's outstanding income tax liability, on 15 December 2013.
Note: you are not required to prepare calculations for part (a) of this question.
(b) (i) Provide a reasoned explanation for the availability or non-availability of agricultural property relief and
business property relief in respect of the intended gift of Hayworth Farm by Ava.
(ii) Calculate the capital gains tax and the inheritance tax payable in respect of the gift of Hayworth Farm
on the assumption that Ava dies on 1 January 2018. State the due dates for the payment of the tax
liabilities (on the assumption that they are not paid in instalments), the date on which any beneficial
claim(s) need to be submitted and any assumptions made.
You should assume that the tax rates and allowances for the tax year 2011/12 will continue to apply for the
foreseeable future.
gains tax and inheritance tax implications of making a gift of a farm to her nephew.
The following information has been obtained from a letter from Ava and from her client file.
Ava's personal circumstances:
- Ava is 84 years old.
- Ava's husband, Butt, died on 1 November 2013 after a long and serious illness.
- Ava has no children.
Ava's income tax reporting:
- Burt had always looked after Ava's tax affairs as well as his own.
- Ava has recently realised that her income tax return for the tax year 2011/12 has not been submitted.
- The notice to file the income tax return for the tax year 2011/12 was sent to Ava on 1 May 2012.
Bud's will and lifetime gifts:
- Burt made no transfers for the purposes of inheritance tax during his lifetime.
- Butt left quoted shares worth ￡293,000 to his sister.
- Butt left 'Hayworth', a small farm, and the residue of his estate to Ava.
- Consequently, his chargeable death estate was less than his nil rate band.
Ava's lifetime gifts:
- Ava made a gift of quoted company shares (all minority holdings) worth ￡251,000 to her niece on 1
December 2012.
- Ava intends to gift Hayworth Farm to her nephew on 1 February 2014.
- Capital gains tax gift relief will not be claimed in respect of the intended gift.
- Ava is a higher rate taxpayer.
Hayworth Farm:
- Is situated in the UK.
- Was purchased by Burt on 1 January 2004 for ￡330,000.
- Was leased to tenant farmers on 1 January 2005 and was never farmed by Burt.
- Will continue to be leased to and farmed by the tenant farmers in the future.
Hayworth Farm - Valuations of farm buildings and surrounding land:
1 November 2013 1 February 2014
￡ ￡
Market value 494,000 650,000
Agricultural value 300,000 445,000
- It can be assumed that both values will increase by 5% per year from 1 February 2014.
Required
(a) State by when Ava's 2011/12 income tax return should have been submitted and list the consequences of
submitting the return, together with Ava's outstanding income tax liability, on 15 December 2013.
Note: you are not required to prepare calculations for part (a) of this question.
(b) (i) Provide a reasoned explanation for the availability or non-availability of agricultural property relief and
business property relief in respect of the intended gift of Hayworth Farm by Ava.
(ii) Calculate the capital gains tax and the inheritance tax payable in respect of the gift of Hayworth Farm
on the assumption that Ava dies on 1 January 2018. State the due dates for the payment of the tax
liabilities (on the assumption that they are not paid in instalments), the date on which any beneficial
claim(s) need to be submitted and any assumptions made.
You should assume that the tax rates and allowances for the tax year 2011/12 will continue to apply for the
foreseeable future.
【正确答案】Text references. Income tax administration is covered in Chapter 15. The inheritance tax aspects of this question
are dealt with in Chapters 16 and 17.
Top tips. Where you are told that two spouses or civil partners have died, always check to see if the first spouse
had a nil rate band which was not fully utilised.
Easy marks. Part (a) covered basic income tax administration and should have produced easy marks.
Examiner's comments. Part (a) required a list of the consequences of the late submission of an income tax return
and the late payment of the individual's income tax liability. This was a relatively straightforward requirement and
the majority of candidates earned marks for the points they made. However, the list should have included four
separate consequences whereas most candidates only included two.
Part (b) concerned the inheritance tax and capital gains tax implications of the gift of a farm and was in two parts.
Part (i) required a reasoned explanation of the availability of both agricultural property relief and business property
relief in respect of the gift. This part was answered well with many candidates scoring full marks.
Part (ii) required calculations of the capital gains tax and inheritance tax payable in respect of the gift together with
the due dates of payment. Answers to this part varied considerably. Stronger candidates were able to score well
with accurate calculations and correct dates. Weaker candidates confused the two taxes and the reliefs and
exemptions available by, for example, including agricultural property relief in the capital gains tax computation.
They also failed to include the dates asked for. The majority of students missed the fact that a proportion of the
husband's nil rate band could be transferred to the widow.
are dealt with in Chapters 16 and 17.
Top tips. Where you are told that two spouses or civil partners have died, always check to see if the first spouse
had a nil rate band which was not fully utilised.
Easy marks. Part (a) covered basic income tax administration and should have produced easy marks.
Examiner's comments. Part (a) required a list of the consequences of the late submission of an income tax return
and the late payment of the individual's income tax liability. This was a relatively straightforward requirement and
the majority of candidates earned marks for the points they made. However, the list should have included four
separate consequences whereas most candidates only included two.
Part (b) concerned the inheritance tax and capital gains tax implications of the gift of a farm and was in two parts.
Part (i) required a reasoned explanation of the availability of both agricultural property relief and business property
relief in respect of the gift. This part was answered well with many candidates scoring full marks.
Part (ii) required calculations of the capital gains tax and inheritance tax payable in respect of the gift together with
the due dates of payment. Answers to this part varied considerably. Stronger candidates were able to score well
with accurate calculations and correct dates. Weaker candidates confused the two taxes and the reliefs and
exemptions available by, for example, including agricultural property relief in the capital gains tax computation.
They also failed to include the dates asked for. The majority of students missed the fact that a proportion of the
husband's nil rate band could be transferred to the widow.
【答案解析】