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ACCA PAPER F6 TAXATION (UK) FA 2013 STUDY TEXT FOR EXAMS IN 2014 GET YOUR CODE FOR FREE ONLINE RESOURCES INSIDE ThiNganHang.com ThiNganHang.com
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S T U D Y PAPER F6 T E X TAXATION (UK) T FA 2013 BPP Learning Media is the sole ACCA Platinum Approved Learning Partner – content for the ACCA qualification. In this, the only Paper F6 study text to be reviewed by the examiner: We discuss the best strategies for studying for ACCA exams We highlight the most important elements in the syllabus and the key skills you will need We signpost how each chapter links to the syllabus and the study guide We provide lots of exam focus points demonstrating what the examiner will want you to do ThiNganHang.comWe emphasise key points in regular fast forward summaries We test your knowledge of what you've studied in quick quizzes We examine your understanding in our exam question bank We reference all the important topics in our full index BPP's Practice & Revision Kit, i-Pass and i-Learn products also support this paper. FOR EXAMS IN 2014 ThiNganHang.com
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First edition 2007 All rights reserved. No part of this publication may be Eighth edition November 2013 reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, ISBN 9781 4727 5302 1 photocopying, recording or otherwise, without the prior (Previous ISBN 9781 4453 9648 4) written permission of BPP Learning Media Ltd. eISBN 9781 4453 6735 4 We are grateful to the Association of Chartered Certified British Library Cataloguing-in-Publication Data Accountants for permission to reproduce past A catalogue record for this book is available from examination questions. The suggested solutions in the the British Library exam answer bank have been prepared by BPP Learning Media Ltd, unless otherwise stated. Published by BPP Learning Media Ltd BPP House, Aldine Place 142-144 Uxbridge Road London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom by Polestar Wheatons Hennock Road Marsh Barton Exeter EX2 8RP Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources. © BPP Learning Media Ltd 2013 ThiNganHang.com ii ThiNganHang.com
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Contents Page Introduction Helping you to pass – the ONLY F6 Study Text reviewed by the examiner! vi Studying F6 viii Syllabus and Study Guide x The exam paper xxv Part A UK tax system 1 Introduction to the UK tax system 3 Part B Income tax and national insurance contributions 2 The computation of taxable income and the income tax liability 17 3 Employment income 41 4 Taxable and exempt benefits. The PAYE system 53 5 Pensions 75 6 Property income 85 7 Computing trading income 95 8 Capital allowances 115 9 Assessable trading income 133 10 Trading losses 145 11 Partnerships and limited liability partnerships 161 12 National insurance contributions 171 Part C Chargeable gains for individuals 13 Computing chargeable gains 183 14 Chattels and the principal private residence exemption 195 15 Business reliefs 207 16 Shares and securities 219 Part D Tax administration for individuals 17 Self assessment and payment of tax by individuals 231 Part E Inheritance tax 18 Inheritance tax: scope and transfers of value 251 Part F Corporation tax 19 Computing taxable total profits 275 20 Computing the corporation tax liability 289 21 Chargeable gains for companies 301 ThiNganHang.comPart G Value added tax222324 Self assessment and payment of tax by companiesLossesGroups 337313325 25 An introduction to VAT 349 26 Further aspects of VAT 369 iii ThiNganHang.com
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Exam question and answer bank 383 Tax tables 463 Index 469 Review form ThiNganHang.com iv ThiNganHang.com
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Helping you to pass – the ONLY F6 Study Text reviewed by the examiner! BPP Learning Media – the sole Platinum Approved Learning Partner – content As ACCA’s sole Platinum Approved Learning Partner – content, BPP Learning Media gives you the unique opportunity to use examiner-reviewed study materials for the 2014 exams. By incorporating the examiner’s comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Study Text provides excellent, ACCA-approved support for your studies. The PER alert! Before you can qualify as an ACCA member, you do not only have to pass all your exams but also fulfil a three year practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the ‘PER alert’ feature. You will find this feature throughout the Study Text to remind you that what you are learning to pass your ACCA exams is equally useful to the fulfilment of the PER requirement. Your achievement of the PER should now be recorded in your on-line My Experience record. Tackling studying Studying can be a daunting prospect, particularly when you have lots of other commitments. The different features of the text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success. Developing exam awareness Our Texts are completely focused on helping you pass your exam. Our advice on Studying F6 outlines the content of the paper and the necessary skills the examiner expects you to demonstrate. Exam focus points are included within the chapters to highlight when and how specific topics were examined, or how they might be examined in the future. ThiNganHang.comUsing the Syllabus and Study GuideYou can find the Syllabus and Study Guide on pages x – xxiv of this Study Text Testing what you can do Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt. We include Questions – lots of them – both within chapters and in the Exam Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content. vi Introduction ThiNganHang.com
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Chapter features Each chapter contains a number of helpful features to guide you through each topic. Topic list Tells you what you will be studying in this chapter and the Topic list Syllabusreference relevant section numbers, together the ACCA syllabus references. Introduction Puts the chapter content in the context of the syllabus as a whole. Study Guide Links the chapter content with ACCA guidance. Exam Guide Highlights how examinable the chapter content is likely to be and the ways in which it could be examined. Summarises the content of main chapter headings, FAST FORWARD allowing you to preview and review each section easily. Examples Demonstrate how to apply key knowledge and techniques. Definitions of important concepts that can often earn you Key terms easy marks in exams. Tell you when and how specific topics were examined, or Exam focus points how they may be examined in the future. This is a new feature that gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER). Question Give you essential practice of techniques covered in the chapter. Chapter Roundup A full list of the Fast Forwards included in the chapter, providing an easy source of review. Quick Quiz A quick test of your knowledge of the main topics in the chapter. Found at the back of the Study Text with more ThiNganHang.comExam Question Bank comprehensive chapter questions. Cross referenced foreasy navigation. Introduction vii ThiNganHang.com
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Studying F6 As the name suggests, this paper examines the basic principles of taxation. This is a very important area for certified accountants as many areas of practice involve a consideration of taxation issues. It also provides a foundation for P6: Advanced Taxation which will be chosen by those who work in a tax environment. What the F6 examiner is looking for The examiner is looking for students to show that they have a solid understanding of the UK tax system and the main taxes which are income tax, corporation tax, national insurance contributions, capital gains tax, inheritance tax and value added tax. The examiner has written several technical articles including two on Inheritance Tax, two on Chargeable gains, one on groups, two on VAT, one on benefits, one on motor cars, and one on Finance Act 2013. All these articles are available on the ACCA website. Make sure you read them to gain further insight into what the examiner is looking for. 1 What F6 is about The UK tax system The syllabus introduces the rationale behind – and the functions of – the tax system. The taxes It then covers the main UK taxes which apply to individuals and businesses. Income tax and corporation tax cover the widest areas of the syllabus, forming the basis for questions 1 and 2 totalling 55% of the marks. Value added tax (VAT) is likely to be covered in one of these questions, in which case at least 10 of the 55 marks will be awarded for VAT, although it is possible that a separate question on VAT will be included instead. Chargeable gains (either personal or corporate) will be covered in question 3, for which 15 marks will be available. There will always be between 5 and 15 marks on inheritance tax which will be within questions 3, 4 or 5. National insurance will not be examined as a separate question but may be examined in any question on income tax or corporation tax. You will be expected to have a detailed knowledge of these taxes, but no previous knowledge is assumed. You should study the basics carefully and learn the proforma computations. It then becomes straightforward to complete these by slotting in figures from your detailed workings. As well as being able to calculate tax liabilities, you will be expected to explain the basis of the calculations and how a taxpayer can minimise or defer tax liabilities. Compliance The final part of the syllabus covers the compliance obligations of the taxpayer. This is likely to form an element in one or more questions in the exam. A knowledge of tax is incomplete without an ThiNganHang.comunderstanding of how the tax is collected. viii Introduction ThiNganHang.com
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2 What skills are required? Be able to integrate knowledge and understanding from across the syllabus to enable you to complete detailed computations of tax liabilities. Be able to explain the underlying principles of taxation by providing a simple summary of the rules and how they apply to the particular situation. Be able to apply tax planning techniques by identifying available options and testing them to see which has the greater effect on tax liabilities. 3 How to improve your chances of passing 3.1 Study the whole syllabus Study the entire syllabus – all the questions in the exam are compulsory. This gives the examiner the opportunity to test all major areas of the syllabus on every paper. 3.2 Lots of question practice Practise as many questions as you can under timed conditions – this is the best way of developing good exam technique. Make use of the Question Bank at the back of this Text. BPP's Practice and Revision Kit contains numerous exam standard questions (many of them taken from past exam papers) as well as three mock exams for you to try. Answer selectively – the examiner will expect you to consider carefully what is relevant and significant enough to include in your answer. Don't include unnecessary information. Present your answers in a professional manner – use subheadings and leave spaces between paragraphs, make sure that your numerical workings are clearly set out. Even if you make a mistake in your calculations, you will still gain marks if you show that you understand the principles involved. Answer all parts of the question – leaving out a five mark part may be the difference between a pass and a fail. ThiNganHang.com Introduction ix ThiNganHang.com
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Syllabus and Study Guide Taxation (UK) (F6) MAIN CAPABILITIES June & December 2014 On successful completion of this paper Syllabus candidates should be able to: A Explain the operation and scope of the tax system B Explain and compute the income tax liabilities of individuals ATX (P6) C Explain and compute the corporation tax liabilities of individual companies and groups of companies D Explain and compute the chargeable TX (F6) gains arising on companies and individuals E Explain and compute the inheritance tax liabilities of individuals AIM F Explain and compute the effect of national insurance contributions on To develop knowledge and skills relating to the employees, employers and the self tax system as applicable to individuals, single employed companies, and groups of companies. G Explain and compute the effects of value added tax on incorporated and unincorporated businesses H Identify and explain the obligations of tax payers and/or their agents and the implications of non-compliance RELATIONAL DIAGRAM OF MAIN CAPABILITIES The UK tax system (A) Income tax Corporation tax Chargeable Inheritance ThiNganHang.comliabilities (B) liabilities (C) gains (D) tax (E) National Insurance contributions VAT (G) (F) The obligations of the taxpayer and/or their agents (H) x Introduction ThiNganHang.com
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RATIONALE 4. Property and investment income The syllabus for Paper F6, Taxation, introduces 5. The comprehensive computation of taxable candidates to the subject of taxation and income and income tax liability provides the core knowledge of the underlying principles and major technical areas of taxation 6. The use of exemptions and reliefs in as they affect the activities of individuals and deferring and minimising income tax businesses. liabilities Candidates are introduced to the rationale C. Corporation tax liabilities behind – and the functions of – the tax system. The syllabus then considers the separate taxes 1. The scope of corporation tax that an accountant would need to have a detailed knowledge of, such as income tax from 2. Taxable total profits self-employment, employment and investments, the corporation tax liability of individual 3. The comprehensive computation of companies and groups of companies, the corporation tax liability national insurance contribution liabilities of both employed and self employed persons, the value 4. The effect of a group corporate structure added tax liability of businesses, the chargeable for corporation tax purposes gains arising on disposals of investments by both individuals and companies, and the 5. The use of exemptions and reliefs in inheritance tax liabilities arising on chargeable deferring and minimising corporation tax lifetime transfers and on death. liabilities Having covered the core areas of the basic D. Chargeable gains taxes, candidates should be able to compute tax liabilities, explain the basis of their calculations, 1. The scope of the taxation of capital gains apply tax planning techniques for individuals and companies and identify the compliance 2. The basic principles of computing gains issues for each major tax through a variety of and losses business and personal scenarios and situations. 3. Gains and losses on the disposal of DETAILED SYLLABUS movable and immovable property A. The UK tax system 4. Gains and losses on the disposal of shares and securities 1. The overall function and purpose of taxation in a modern economy 5. The computation of capital gains tax payable by individuals 2. Different types of taxes 6. The use of exemptions and reliefs in ThiNganHang.com3. Principal sources of revenue law and deferring and minimising tax liabilities practice arising on the disposal of capital assets 4. Tax avoidance and tax evasion E. Inheritance tax B. Income tax liabilities 1. The scope of inheritance tax 1. The scope of income tax 2. The basic principles of computing transfers of value 2. Income from employment 3. The liabilities arising on chargeable lifetime 3. Income from self-employment transfers and on the death of an individual Introduction xi ThiNganHang.com
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4. The use of exemptions in deferring and minimising inheritance tax liabilities 5. Payment of inheritance tax F. National insurance contributions 1. The scope of national insurance 2. Class 1 and Class 1A contributions for employed persons 3. Class 2 and Class 4 contributions for self- employed persons G. Value added tax 1. The scope of value added tax (VAT) 2. The VAT registration requirements 3. The computation of VAT liabilities 4. The effect of special schemes H. The obligations of taxpayers and/or their agents 1. The systems for self assessment and the making of returns 2. The time limits for the submission of information, claims and payment of tax, including payments on account 3. The procedures relating to compliance checks, appeals and disputes 4. Penalties for non-compliance ThiNganHang.com xii Introduction ThiNganHang.com
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APPROACH TO EXAMINING THE SYLLABUS There will always be at a minimum of 10 marks on value added tax. These marks will normally The syllabus is assessed by a three-hour paper- be included within question one or question two, based examination. although there might be a separate question on value added tax. Assessment: Taxation (UK) There will always be between 5 and 15 marks on The paper will be predominantly computational inheritance tax. Inheritance tax can be included and will have five questions, all of which will be within questions three, four or five. compulsory. National insurance contributions will not be Question one will focus on income tax and examined as a separate question, but may be question two will focus on corporation tax. examined in any question involving income tax The two questions will be for a total of 55 or corporation tax. marks, with one of the questions being for 30 marks and the other being for 25 marks. Groups may be examined in either question two, question four or question five. Question three will focus on chargeable gains (either personal or corporate) and will A small element of chargeable gains may be be for 15 marks. included in questions other than question 3. Questions four and five will be on any area Any of the five questions might include the of the syllabus, can cover more than one consideration of issues relating to the topic, and will be for 15 marks. minimisation or deferral of tax liabilities. ThiNganHang.com Introduction xiii ThiNganHang.com
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Study Guide Excluded topics A THE UK TAX SYSTEM The split year treatment where a person comes to the UK or leaves the 1. The overall function and purpose of UK. taxation in a modern economy Foreign income, non-residents and a) Describe the purpose (economic, social double taxation relief. etc) of taxation in a modern economy.[2] Income from trusts and settlements. 2. Different types of taxes 2. Income from employment a) Identify the different types of capital and revenue tax.[1] a) Recognise the factors that determine whether an engagement is treated as b) Explain the difference between direct and employment or self-employment.[2] indirect taxation.[2] b) Recognise the basis of assessment for 3. Principal sources of revenue law and employment income.[2] practice c) Compute the income assessable.[2] a) Describe the overall structure of the UK tax system.[1] d) Recognise the allowable deductions, including travelling expenses.[2] b) State the different sources of revenue law.[1] e) Discuss the use of the statutory approved mileage allowances.[2] c) Appreciate the interaction of the UK tax system with that of other tax f) Explain the PAYE system.[1] jurisdictions.[2] g) Identify P11D employees.[1] d) Appreciate the need for double taxation agreements.[2] h) Compute the amount of benefits assessable.[2] 4. Tax avoidance and tax evasion i) Explain the purpose of a dispensation from a) Explain the difference between tax HM Revenue & Customs.[2] avoidance and tax evasion, and the purposes of the General Anti-Abuse Rule j) Explain how charitable giving can be made (GAAR).[1] through a payroll deduction scheme.[1] ThiNganHang.comb) Explain the need for an ethical and Excluded topics professional approach.[2] The calculation of a car benefit where Excluded topic emission figures are not available. Specific anti-avoidance legislation. The exemption for zero emission company motor cars. B INCOME TAX LIABILITIES Share and share option incentive 1. The scope of income tax schemes for employees. a) Explain how the residence of an individual is determined.[1] xiv Introduction ThiNganHang.com
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Payments on the termination of j Partnerships and limited liability employment, and other lump sums partnerships received by employees. i) Explain how a partnership is assessed to tax.[2] 3. Income from self-employment ii) Compute the assessable profits for each partner following a change in a) Recognise the basis of assessment for the profit sharing ratio.[2] self-employment income.[2] iii) Compute the assessable profits for each partner following a change in b) Describe and apply the badges of trade.[2] the membership of the partnership.[2] iv) Describe the alternative loss relief c) Recognise the expenditure that is allowable claims that are available to in calculating the tax-adjusted trading partners.[1] profit.[2] v) Explain the loss relief restriction that applies to the partners of a limited d) Compute the assessable profits using the liability partnership.[1] cash basis for small businesses.[2] Excluded topics e) Recognise the relief that can be obtained for pre-trading expenditure.[2] Change of accounting date. f) Compute the assessable profits on The 100% allowance for expenditure commencement and on cessation.[2] on renovating business premises in disadvantaged areas, flats above g) Recognise the factors that will influence shops and water technologies. the choice of accounting date.[2] Capital allowances for industrial h) Capital allowances buildings, agricultural buildings, i) Define plant and machinery for capital patents, scientific research and allowances purposes.[1] know how. ii) Compute writing down allowances, first-year allowances and the annual CO emissions thresholds for capital 2 investment allowance.[2] allowances for motor cars prior to 6 iii) Compute capital allowances for April 2013. motor cars.[2] iv) Compute balancing allowances and Apportionment in order to determine balancing charges.[2] the amount of annual investment v) Recognise the treatment of short life allowance where a period of account assets.[2] spans 1 January 2013. vi) Explain the treatment of assets included in the special rate pool.[2] Enterprise zones. ThiNganHang.comi) i)Relief for trading lossesii) be carried forward.Understand how trading losses canUnderstand how trading losses can[2] Investment income of a partnership.The allocation of notional profits andlosses for a partnership. be claimed against total income and chargeable gains, and the restriction Farmers averaging of profits. that can apply.[2] iii) Explain and compute the relief for The averaging of profits for authors trading losses in the early years of a and creative artists. trade.[1] iv) Explain and compute terminal loss Loss relief following the relief.[1] incorporation of a business. Introduction xv ThiNganHang.com
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Loss relief for shares in unquoted e) Explain the treatment of gift aid trading companies. donations.[1] 4. Property and investment income f) The child benefit tax charge.[1] a) Compute property business profits.[2] g) Explain the treatment of property owned jointly by a married couple, or by a couple b) Explain the treatment of furnished holiday in a civil partnership.[1] lettings.[1] Excluded topics c) Describe rent-a-room relief.[1] The blind person’s allowance and the d) Compute the amount assessable when a married couple’s allowance. premium is received for the grant of a short lease.[2] Tax credits. e) Understand how relief for a property Maintenance payments. business loss is given.[2] The income of minor children. f) Compute the tax payable on savings income.[2] 6. The use of exemptions and reliefs in deferring and minimising income tax g) Compute the tax payable on dividend liabilities income.[2] a) Explain and compute the relief given for h) Explain the treatment of individual savings contributions to personal pension accounts (ISAs) and other tax exempt schemes, using the rules applicable from 6 investments.[1] April 2011.[2] Excluded topics b) Describe the relief given for contributions to occupational pension schemes, using The deduction for expenditure by the rules applicable from 6 April 2011.[1] landlords on energy-saving items. c) Explain how a married couple or a couple Premiums for granting subleases. in a civil partnership can minimise their tax liabilities.[2] Junior ISAs. Excluded topics 5. The comprehensive computation of taxable income and income tax liability The conditions that must be met in order for a pension scheme to obtain a) Prepare a basic income tax computation approval from HM Revenue & ThiNganHang.comb) Calculate the amount of personal allowanceavailable generally, and for people borninvolving different types of income.[2] Customs.The enterprise investment scheme andthe seed enterprise investment before 6 April 1948.[2] scheme. c) Compute the amount of income tax Venture capital trusts. payable.[2] Tax reduction scheme for gifts of pre- d) Explain the treatment of interest paid for a eminent objects. qualifying purpose.[2] xvi Introduction ThiNganHang.com
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C CORPORATION TAX LIABILITIES h) Understand how trading losses can be claimed against income of the current or 1. The scope of corporation tax previous accounting periods.[2] a) Define the terms ‘period of account’, i) Recognise the factors that will influence ‘accounting period’, and ‘financial year’.[1] the choice of loss relief claim.[2] b) Recognise when an accounting period j) Explain how relief for a property business starts and when an accounting period loss is given.[1] finishes.[1] k) Compute taxable total profits.[2] c) Explain how the residence of a company is determined.[2] Excluded topics Excluded topics Research and development expenditure. Investment companies. Non-trading deficits on loan Close companies. relationships. Companies in receivership or Relief for intangible assets. liquidation. Patent box. Reorganisations. 3. The comprehensive computation of The purchase by a company of its own corporation tax liability shares. a) Compute the corporation tax liability and Personal service companies. apply marginal relief.[2] 2. Taxable total profits b) Explain the implications of receiving franked investment income.[2] a) Recognise the expenditure that is allowable in calculating the tax-adjusted trading 4. The effect of a group corporate structure profit.[2] for corporation tax purposes b) Explain how relief can be obtained for pre- a) Define an associated company and trading expenditure.[1] recognise the effect of being an associated company for corporation tax purposes.[2] c) Compute capital allowances (as for income tax).[2] b) Define a 75% group, and recognise the reliefs that are available to members of ThiNganHang.comd)e) Compute property business profits.Explain the treatment of interest paid andreceived under the loan relationship[2] c) Define a 75% capital gains group, andrecognise the reliefs that are available tosuch a group.[2] rules.[1] members of such a group.[2] f) Explain the treatment of qualifying Excluded topics charitable donations.[2] Consortia. g) Understand how trading losses can be carried forward.[2] Pre-entry gains and losses. Introduction xvii ThiNganHang.com
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The anti-avoidance provisions where f) Explain the treatment where an asset is arrangements exist for a company to damaged, lost or destroyed, and the leave a group. implications of receiving insurance proceeds and reinvesting such proceeds.[2] The tax charge that applies where a company leaves a group within six Excluded topics years of receiving an asset by way of a no gain/no loss transfer. Small part disposals of land, and small capital sums received when an asset is Overseas aspects of corporation tax. damaged. Transfer pricing. Losses in the year of death. 5. The use of exemptions and reliefs in Relief for losses incurred on loans deferring and minimising corporation tax made to traders. liabilities: Negligible value claims. The use of such exemptions and reliefs is implicit within all of the above sections 1 3. Gains and losses on the disposal of to 4 of part C of the syllabus, concerning movable and immovable property corporation tax. a) Identify when chattels and wasting assets D CHARGEABLE GAINS are exempt.[1] 1. The scope of the taxation of capital gains b) Compute the chargeable gain when a a) Describe the scope of capital gains tax. chattel is disposed of.[2] [2] c) Calculate the chargeable gain when a b) List those assets which are exempt.[1] wasting asset is disposed of.[2] Excluded topics d) Compute the exemption when a principal private residence is disposed of.[2] Assets situated overseas and double taxation relief. e) Calculate the chargeable gain when a Partnership capital gains. principal private residence has been used for business purposes.[2] 2. The basic principles of computing gains and losses f) Identify the amount of letting relief available when a principal private residence a) Compute capital gains for both individuals has been let out.[2] and companies.[2] Excluded topic ThiNganHang.comb) Calculate the indexation allowanceavailable to companies.[2] The disposal of leases and the creationof sub-leases. c) Explain the treatment of capital losses for 4. Gains and losses on the disposal of both individuals and companies.[1] shares and securities d) Explain the treatment of transfers between a) Calculate the value of quoted shares where a husband and wife or between a couple in they are disposed of by way of a gift.[2] a civil partnership.[2] e) Compute the amount of allowable expenditure for a part disposal.[2] xviii Introduction ThiNganHang.com
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b) Explain and apply the identification rules as Excluded topics they apply to individuals and to companies, including the same day, nine Incorporation relief. day, and 30 day matching rules.[2] Reinvestment relief. c) Explain the pooling provisions.[2] Entrepreneurs’ relief for associated d) Explain the treatment of bonus issues, disposals. rights issues, takeovers and reorganisations.[2] E INHERITANCE TAX e) Explain the exemption available for gilt- 1. The scope of inheritance tax edged securities and qualifying corporate bonds.[1] a) Describe the scope of inheritance tax. [2] Excluded topics b) Identify and explain the persons chargeable. [2] The exemption for employee shareholders. Excluded topics A detailed question on the pooling Pre 18 March 1986 lifetime transfers. provisions for shares as they apply to limited companies. Transfers of value by close companies. The small part disposal rules applicable Domicile, deemed domicile, and non- to rights issues. UK domiciled individuals. Substantial shareholdings. Trusts. Gilt-edged securities and qualifying 2. The basic principles of computing corporate bonds other than the fact transfers of value that they are exempt. a) State, explain and apply the meaning of 5. The computation of capital gains tax transfer of value, chargeable transfer and payable by individuals potentially exempt transfer.[2] a) Compute the amount of capital gains tax b) Demonstrate the diminution in value payable.[2] principle.[2] 6. The use of exemptions and reliefs in c) Demonstrate the seven year accumulation deferring and minimising tax liabilities principle taking into account changes in arising on the disposal of capital assets the level of the nil rate band.[2] ThiNganHang.coma) applies to individuals.Explain and apply entrepreneurs’ relief as it[2] Excluded topics Excluded property. b) Explain and apply rollover relief as it Related property. applies to individuals and companies.[2] The tax implications of the location of c) Explain and apply holdover relief for the assets. gift of business assets.[2] Gifts with reservation of benefit. Associated operations. Introduction xix ThiNganHang.com
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