【正确答案】Sale of Bar Ltd Chargeable gain on the sale of Bar Ltd On 1 December 2013, Aero Ltd and Bar Ltd were members of a capital gains group because they were both 75% subsidiaries of Helm Ltd. Accordingly, the building was deemed to have been transferred for consideration which gave Aero Ltd neither a gain nor a loss (‘no gain, no loss’) on this date. However, a degrouping charge equal to the gain which would have arisen if the building had been sold at its market value as at 1 December 2013 arises because: – The sale of Bar Ltd on 30 April 2014 was within six years of the no gain, no loss transfer; and – Bar Ltd owned the building at the time it left the Helm Ltd group. The degrouping charge is added to the sales proceeds received by Helm Ltd in respect of the sale of Bar Ltd.

【正确答案】(b) Drill Ltd. Any amounts charged in the accounts in relation to the loan, i.e. both the interest and the loan arrangement fee, will be relieved in accordance with the loan relationship rules. The tax treatment of these amounts depends on whether the loan is for trading or non-trading purposes. One quarter of the building will initially be rented out to a third party, such that ￡300,000 (1/4 x ￡1,200,000) of the loan is for non-trading purposes. Accordingly, 22·2% (￡300,000/￡1,350,000) of the loan is for non-trading purposes, and the balance of 77·8% is for trading purposes. The amounts charged for trading purposes are allowable when calculating taxable income. The amounts charged for non-trading purposes are deducted from any income or other credits relating to non-trade loan relationships, i.e. the small amount of interest income received by Drill Ltd. Given the amounts involved, this will result in a non-trade loan relationship deficit, which can be utilised as follows: – deducted from total profits of the accounting period; – surrendered as group relief; – carried back and offset against credits in respect of non-trading loan relationships in the previous 12 months; – carried forward for offset against future non-trading income and chargeable gains.

【正确答案】Cog Ltd – chargeable gain on the sale of the warehouse. Rollover relief Rollover relief will not be available to relieve the chargeable gain arising on the sale of Cog Ltd’s warehouse. This is because the warehouse was not a qualifying business asset for the purposes of this relief, as it had never been used by the company for the purposes of its trade. Drill Ltd’s capital losses Drill Ltd’s capital losses are pre-entry capital losses because they were realised before Drill Ltd became a member of the Helm Ltd group. As such, the losses can only be offset against chargeable gains on: – assets sold by Drill Ltd before it became a member of the Helm Ltd capital gains group; – assets already owned by Drill Ltd at the time it became a member of the Helm Ltd capital gains group; – assets purchased by Drill Ltd for use in its trade after it became a member of the Helm Ltd capital gains group (excluding any assets purchased from members of the Helm Ltd group). Accordingly, Drill Ltd’s capital losses cannot be used to relieve the chargeable gain on the sale of the warehouse by Cog Ltd.

【正确答案】Becoming tax advisers to Gomez and the Helm Ltd group of companies Information required: – Evidence of the identity of Gomez (for example, his passport) and his address. – The primary business address and registered office of each of the companies. – Proof of incorporation of each of the companies. – Details of the directors and shareholders of the companies and the identities of those persons instructing the firm on behalf of the companies. Actions to take: – We must have regard to the fundamental principles of professional ethics, for example, integrity and professional competence. This requires us to consider whether becoming tax advisers to Gomez and the Helm Ltd group of companies would create any threats to compliance with these principles. If any such threats are identified, we should not accept the appointment unless the threats can be reduced to an acceptable level via the implementation of safeguards. – We should contact the existing tax adviser(s) in order to ensure that there has been no action by Gomez or the companies which would preclude the acceptance of the appointment on ethical grounds.