On 1 July 2014, Sameer made a cash gift of ￡2,500 to his sister.
On 1 May 2015, he made a cash gift of ￡2,000 to a friend.
On 1 June 2015, he made a cash gift of ￡50,000 to a trust. Sameer has not made any other lifetime gifts.
In respect of Sameer’s cash gift of ￡50,000 to the trust, what is the lifetime transfer of value for inheritance tax purposes after taking account of all available exemptions?
On 31 March 2016, Angus sold a house, which he had bought on 31 March 2002.
Angus occupied the house as his main residence until 31 March 2007, when he left for employment abroad.
Angus returned to the UK on 1 April 2009 and lived in the house until 31 March 2010, when he bought a flat in a neighbouring town and made that his principal private residence.
What is Angus’ total number of qualifying months of occupation for principal private residence relief on the sale of the house?
Abena has made the following gross contributions to her personal pension scheme over the past three tax years:
What is the maximum gross contribution which Abena can make to her personal pension scheme for the tax year 2015–16 without giving rise to an annual allowance charge?
Triangle Ltd is registered for value added tax (VAT) and uses the annual accounting scheme.
For the year ended 31 December 2015, the net VAT payable by Triangle Ltd was ￡73,500.
For the year ended 31 December 2014, the net VAT payable by Triangle Ltd was ￡47,700.
What monthly payments on account of VAT must Triangle Ltd make in respect of the year ended 31 December 2015 prior to submitting its VAT return for that year?
A.Nine monthly payments of ￡7,350
B.Nine monthly payments of ￡4,770
C.Ten monthly payments of ￡4,770
D.Ten monthly payments of ￡7,350
Lili Ltd commenced trading on 1 January 2015. The company incurred the following expenditure prior to 1 January 2015:
What is the amount of Lili Ltd’s deductible pre-trading expenditure in respect of the year ended 31 December 2015?
Paloma has been trading for a number of years. Her tax adjusted trading profit for the year ended 31 May 2015 was ￡48,000 and for the year ended 31 May 2016 was ￡43,200.
What is the amount of class 4 national insurance contributions (NIC) payable by Paloma for the tax year 2015–16?
Which of the following statements is/are true?
(1) Corporation tax is a direct tax on the turnover of companies
(2) National insurance is a direct tax suffered by employees, employers and the self-employed on earnings
(3) Inheritance tax is a direct tax on transfers of income by individuals
(4) Value added tax is a direct tax on the supply of goods and services by businesses
A.1 and 3 only
C.1, 2, 3 and 4
D.1, 2 and 4 only
Which of the following statements concerning self-assessment tax returns for individuals is true?
A.Individuals with tax payable of less than ￡1,000 for a tax year are not required to file a tax return
B.Individuals are only required to file a tax return for a tax year if they receive a notice to deliver from HM Revenue and Customs (HMRC)
C.All individuals who submit a tax return on time are able to have their tax payable calculated by HM Revenue and Customs (HMRC)
D.The tax return for an individual covers income tax, class 1, class 2 and class 4 national insurance contributions and capital gains tax liabilities
In certain circumstances an individual is automatically not resident in the UK.
Which of the following two individuals, if either, is automatically not resident in the UK for the tax year 2015–16?
Eric, who has never previously been resident in the UK. In the tax year 2015–16, he was in the UK for 40 days.
Fran, who was resident in the UK for the two tax years prior to the tax year 2015–16. In the tax year 2015–16, she was in the UK for 18 days.
C.Both Eric and Fran
D.Neither Eric nor Fran
Max is employed by Star Ltd. On 6 April 2014, Star Ltd provided Max with a camera for his personal use. The camera had a market value of ￡2,000 on 6 April 2014.
On 6 April 2015, Star Ltd gave the camera to Max for free. The camera had a market value of ￡1,400 on 6 April 2015.
What is Max’s taxable benefit in respect of the camera for the tax year 2015–16?
The following scenario relates to questions 1–5.
Adana died on 17 March 2016, and inheritance tax (IHT) of ￡566,000 is payable in respect of her chargeable estate. Under the terms of her will, Adana left her entire estate to her children.
At the date of her death, Adana had the following debts and liabilities:
(1) An outstanding interest-only mortgage of ￡220,000.
(2) Income tax of ￡43,700 payable in respect of the tax year 2015–16.
(3) Legal fees of ￡4,600 incurred by Adana’s sister which Adana had verbally promised to pay.
Adana’s husband had died on 28 May 2006, and only 20% of his inheritance tax nil rate band was used on his death. The nil rate band for the tax year 2006–07 was ￡285,000.
On 22 April 2006, Adana had made a chargeable lifetime transfer of shares valued at ￡500,000 to a trust. Adana paid the lifetime IHT of ￡52,250 arising from this gift. If Adana had not made this gift, her chargeable estate at the time of her death would have been ￡650,000 higher than it otherwise was. This was because of the subsequent increase in the value of the gifted shares.
What is the maximum nil rate band which will have been available when calculating the IHT of ￡566,000 payable in respect of Adana’s chargeable estate?
What is the total amount of deductions which would have been permitted in calculating Adana’s chargeable estate for IHT purposes?
Who will be responsible for paying the IHT of ￡566,000 in respect of Adana’s chargeable estate, and what is the due date for the payment of this liability?
A.The beneficiaries of Adana’s estate (her children) on 30 September 2016
B.The beneficiaries of Adana’s estate (her children) on 17 September 2016
C.The personal representatives of Adana’s estate on 30 September 2016
D.The personal representatives of Adana’s estate on 17 September 2016
How much of the IHT payable in respect of Adana’s estate would have been saved if, under the terms of her will, Adana had made specific gifts of ￡400,000 to a trust and ￡200,000 to her grandchildren, instead of leaving her entire estate to her children?
How much IHT did Adana save by making the chargeable lifetime transfer of ￡500,000 to a trust on 22 April 2006, rather than retaining the gifted investments until her death?
The following scenario relates to questions 6–10.
Kitten is the controlling shareholder in Kat Ltd, an unquoted trading company.
Kat Ltd sold a freehold factory on 31 May 2015 for ￡364,000, which resulted in a chargeable gain of ￡120,700. The factory was purchased on 1 October 2003 for ￡138,600, and further capital improvements were immediately made at a cost of ￡23,400 during the month of purchase. Further improvements to the factory were made during the month of disposal. The relevant retail prices indexes (RPIs) are as follows:
October 2003 182·6
May 2015 258·0
Kat Ltd is unsure how to reinvest the proceeds from the sale of the factory. The company is considering either purchasing a freehold warehouse for ￡272,000, or acquiring a leasehold office building on a 40-year lease for a premium of ￡370,000. If either reinvestment is made, it will take place on 30 September 2016.
All of the above buildings have been, or will be, used for the purposes of Kat Ltd’s trade.
itten sold 20,000 ￡1 ordinary shares in Kat Ltd on 5 October 2015, which resulted in a chargeable gain of ￡142,200. This disposal qualified for entrepreneurs’ relief.
Kitten had originally subscribed for 90,000 shares in Kat Ltd on 7 July 2008 at their par value. On 22 September 2011, Kat Ltd made a 2 for 3 rights issue. Kitten took up her allocation under the rights issue in full, paying ￡6·40 for each new share issued.
Kitten also sold an antique vase on 16 January 2016, which resulted in a chargeable gain of ￡27,900.
For the tax year 2015–16, Kitten had taxable income of ￡12,000.
What amount of indexation allowance will have been deducted in calculating the chargeable gain of ￡120,700 on the disposal of Kat Ltd’s factory?
If Kat Ltd decides to purchase the freehold warehouse and makes a claim to roll over the chargeable gain on the factory under the rollover relief rules, what will be the base cost of the warehouse for chargeable gains purposes?
If Kat Ltd decides to acquire the leasehold office building and makes a claim to hold over the chargeable gain on the factory under the rollover relief rules, what is the latest date by which the held-over gain will crystallise?
A.Ten years from 31 May 2015
B.The date when the office building is sold
C.40 years from 30 September 2016
D.Ten years from 30 September 2016
What cost figure will have been used in calculating the chargeable gain on Kitten’s disposal of 20,000 ordinary shares in Kat Ltd?
What is Kitten’s capital gains tax (CGT) liability for the tax year 2015–16?