Questions and Answers of Taxation of Individuals

T Ltd has owned 90% of the ordinary share capital of B Ltd for many years. Both are UK resident. Recent results for the two companies are as follows: Trading profit/(loss) Chargeable gains Gift Aid
Roy owns 3,500 ordinary shares in an unlisted company which has an issued share capital of 10,000 ordinary shares. Roy's wife owns a further 1,600 shares. Shareholdings in the company are valued as
A company with seven 51% subsidiaries has taxable total profits of £ 140,000 for the year to 31 March 2018. Dividends received in the year were £50,000. Calculate the corporation tax liability for
The ordinary share capital of PP Ltd (a trading company) is owned 32% by QQ Ltd, 35% by RR Ltd, 23% by SS Ltd. The remaining 10% is owned by various individuals, none of whom own more than 1%. All
P Ltd is the parent company of a small group. All companies in the group are UK resident and all of the issued shares of each company are ordinary shares. Shareholdings within the group are as
Low1 Ltd is a wholly -owned subsidiary of High 1 Ltd. Both companies are UK resident and prepare accounts to 31 March each year. Results for the year to 31 March 2018 are: High1 Ltd Low1 Ltd
The ordinary share capital of W Ltd (which is a trading company) is owned 30% by X Ltd, 25% by Y Ltd and 45% by Z Ltd. All companies are UK resident and prepare accounts to 31 March. Results for the
Low2 Ltd is a 75% subsidiary of High2 Ltd and both companies are UK resident. Recent results are as follows: Trading loss for year to 31 March 2017 Taxable total profits (before group relief): year
J Ltd owns 80% of the ordinary share capital of K Ltd, which owns 80% of the share capital of L Ltd, which owns 80% of the share capital of M Ltd, which owns 80% of the share capital of N Ltd. All of
S1 Ltd and S2 Ltd belong to the same capital gains group. In May 2014, S1 Ltd transferred a chargeable asset to S2 Ltd. This asset had originally cost £10,000 and its market value in May 2014 was
A Ltd owns a quarry. It extracts stone from this quarry and sells it to B Ltd for £10,000 plus VAT. B Ltd converts all of the stone into paving slabs and sell s these slabs to C Ltd for £18,000,
Classify each of the following supplies as either taxable at the standard rate, taxable at the reduced rate, taxable at the zero rate or exempt:(a) a theatre ticket(b) a loaf of bread(c) bank
(a) On 1 August 2017, a standard -rated supply is made with a value of £180. Calculate the VAT charged and the consideration for the supply.(b) On 2 January 2018 , a standard -rated supply is made
A standard-rated supply is made in May 2017 at a price of £340, plus VAT. Calculate the VAT chargeable and the consideration for the supply if:(a) no discount is offered(b) a 2% discount is offered
In June 2017 , a standard-rated supply is made at a price of £4,000, plus VAT. The customer is offered a 3% discount if payment is made within 30 days. Calculate the value of the supply and the VAT
A VAT -exclusive price of £320 is charged for a mixed supply of goods. The goods concerned consist of standard -rated goods which cost the supplier £141 (excluding VAT) and zero-rated goods which
(a) Jim is a sole trade r with a taxable turnover of £7 5,000 per annum. Is he required to register with HMRC?(b) Pearl and Dean are in partnership, operating a business with a taxable turnover of
Kevin begins trading on 1 January 2016 . Taxable turnover during the first two years of trading is as follows:The turnover in January 2017 includes £2,000 relating to the sale of machinery
Sanjay began trading on 1 February 2017, selling standard -rated goods and services. He decided not to register for VAT voluntarily. His turnover (excluding VAT) for the first 16 months of trading
Explain the VAT consequences of a UK business:(a) buying goods from (or selling goods to) another EU country(b) importing goods from a non-EU country(c) exporting goods to a non-EU country.
Lindsey is not registered for VAT. In the yea r to 31 March 2018 , she has inputs costing £10,000 plus VAT at 20%. Her outputs total £35,000.(a) How much profit does she make for the year?(b) If
List the required contents of a valid VAT invoice.
An antiques dealer buys a table from a member of the public for £2,000. The dealer spends a further £750 (plus VAT) on restoration work and then sells the table for £5,000.Compute the output tax
During the quarter to 31 December 2017, Nancy makes supplies as follows: Standard-rated supplies (excluding VAT) Zero-rated supplies Exempt supplies She suffers input tax as follows: Attributed to
With regard to value added tax, explain the main features of the cash accounting scheme and the annual accounting scheme.
The following information relates to the VAT return of Toucan Ltd for the three months to 30 November 2017. All figures are VAT-exclusive unless stated otherwise.(i) Standard-rated supplies made to
(a) During the quarter to 31 August 2017 , Justin makes taxable supplies of £30,000 and exempt supplies of £20,000. Input tax incurred is £1,500. Does he pass either of the two simplified de
During the quarter to 31 December 2017, a taxable person makes the following supplies: Standard-rated supplies (including VAT) Zero-rated supplies Exempt supplies Input tax for the quarter is
Sebastian is self-employed. He drives a ca r with an emission rating of 19 8 g/km and he charges the cost of all the petrol used to his business bank account . In the quarter to 31 July 2017 , he
Tracey is a sole trader. She has the following transactions during the quarter to 31 December 2017 (all amounts shown are VAT-exclusive):Tracey drives a car with an emission rating of 16 4 g/km and
Phoebe made the following transfers during 2017-18: 12 April 2017 17 May 2017 3 August 2017 31 October 2017 1 January 2018 Gift to grandson Gift to her nephew on his marriage Gift to her husband Gift
Tania makes no transfers during 2015 -16. Her only transfers during 2016-17 and 2017-18 are as follows: 2016-17 June 2016 October 2016 January 2017 March 2017 2017-18 July 2017 August 2017 Gift to
Consider each of the following lifetime transfers and classify each one as either an exempt transfer, a PET or a chargeable lifetime transfer. Assume in each case that the transfer was made during
On 5 December 2017, Nicholas makes a gift of £80,000 (after deduction of all relevant exemptions) to a relevant property trust. His only previous chargeable life time transfers were in June 2008
On 1 July 2017 , Violet makes a chargeable lifetime transfer (after deduction of relevant exemptions) of £48,000. Her only previous chargeable lifetime transfer was made in 2013 and had a gross
Wilson dies on 20 December 2017 , having made only the following transfers during his lifetime: 6 June 2007 4 March 2011 11 January 2012 Gift to daughter Gift to relevant property trust Gift to son
On 31 March 2011, Martha gave £500,000 to her daughter as a wedding present. On 1 April 2012 she gave £ 497,000 to a relevant property trust. Martha died on 1 January 2018, having made only these
On 29 September 2017, Hyacinth makes a transfer consisting of 1,000 shares in a listed company. The shares are quoted at 572p - 588p on that date, with recorded bargains at 572p, 577p and 578p.
Toby dies on 2 March 2018, leaving an estate valued at £400,000. None of the transfers made on death are exempt from IHT. Calculate the IHT due on the estate if the total of the gross chargeable
Rose dies on 10 July 2017, leaving an estate valued at £ 525,000. None of the transfers made on death are exempt from IHT apart from a bequest to the RSPCA (a charity). Rose made no chargeable
On 12 November 2007 , Hazel made a gross chargeable transfer to a relevant property trust of £266,000 (after deduction of exemptions). On 1 April 2013 she gave £300,000 to her grandson. These were
Tony died on 11 July 2017, leaving an estate valued at £9 00,000. None of the transfers made on his death were exempt from IHT. He had made the following transfers during his lifetime: 3 May 2009 1
Harriet died on 21 October 2017. Her husband had died previously and his estate on death (including transfers made in the last seven years of his life) had absorbed £1 77,840 of the nil-rate band at
On 1 June 2017, Shirley gives 5,000 shares in a listed company to her daughter. Shares in the company are quoted at 189p - 197p on that date, with recorded bargains at 190p, 192p and 196p. Calculate
Peter has had a home in the UK for many years and has always been UK resident. He has worked in the UK throughout his adult life but he retired in December 2016. During tax year 2017-18 he takes a
Vicky's income for 2017 -18 consists of her UK salary of £45,270 and rents from overseas property (net of 30% withholding tax) of £3,500. Vicky is UK resident in 2017-18 and she is not a Scottish
(a) Jean-Paul is a Canadian citizen. He owns a house in Canada and regards Canada as his home but he lives in the UK for eight months during tax year 2017 -18. During these eight months he tours the
Amy is domiciled in the UK and has lived in the UK all her life. On 1 January 2017 she leaves to work in Australia for two years, returning on 31 December 2018. During her absence she makes no visits
On 1 November 2017 , a UK company receives a non -exempt dividend from an overseas company (in which it has 15% voting power) of £10,500, net of 30% withholding tax. The income statement of the
In the year to 31 March 2018, a UK resident company had UK trading profits of £5, 450,000 and overseas property income (net of 35% withholding tax) of £130,000. Compute the corporation tax
In the year to 31 March 2018 , a UK company has UK trading profits of £4,800,000 and overseas property income (net of 45% withholding tax) of £2,750,000. Gift Aid donations of £100,000 are made in
Donald is resident and domiciled in the UK. He is not a Scottish taxpayer. He has the following income in tax year 2017-18: UK trading profits Income from UK property Income from foreign property
Brist Ltd is a UK resident company which prepares annual accounts to 31 March. In the year to 31 March 2018, the company had a UK trading profit of £2,120,000 and received overseas property income
A UK resident company has 19 subsidiaries, five of which are situated abroad. In the year to 31 March 2018, the company had the following results: UK trading profits UK dividends received UK
In April 201 7, HMRC issues a notice requiring an individual to submit a tax return for the year 2016-17. The return is submitted electronically to HMRC on 8 December 2017.(a) State the date by
Calculate the 2017-18 income tax liability of a non-Scottish taxpayer with taxable income (i.e. income remaining after deducting any available personal allowance)
Calculate the personal sav ings allowance available in 2017 -18 to a taxpayer with taxable income for the year (i.e. net income less any available personal allowance)
In 2017-18, Robert has business profits of £ 39,700 and receives bank interest of £ 1,250. His personal allowance is £11,500. Calculate Robert's income tax liability for the year.
In 2017-18, Roberta has rental income of £ 15,700 and receives building society interest of £1,100. Her personal allowance is £11,500. Calculate the income tax liability for the year.
In 2017-18, Kenneth (who is not a Scottish taxpayer) has business profits of £ 44,200 and bank interest of £980. His personal allowance for the year is £11,500. He makes no Gift Aid donations or
In 2017-18, Philip (who is not a Scottish taxpayer) has business profits of £240,235 and receives building society interest of £1,600. His personal allowance for the year is zero. He makes no Gift
In 2017-18, Philippa has business prof its of £ 8,000. She also receives bank interest of £380 and net loan interest of £36,680. Her personal allowance is £11,500 and she makes no Gift Aid
Calculate the income tax liability for 2017-18 of a non -Scottish taxpayer with a taxable income (after deducting any available personal allowance) of:(a) £1,830 (b) £32,300 (c) £67,833 (d)
Calculate the 2017-18 income tax liability of a non -Scottish taxpayer with income for the year as follows:(a) Business profits of £27,105 and bank interest of £720.(b) Business profits £44,150,
Stephanie (who is not a Scottish taxpayer) has the following income in 2017-18:Income from self-employment £28,880 Rents received £15,730 Bank interest £200 Dividends £250 Compute Stephanie's
Ernest (who is not a Scottish taxpayer) has a retirement pension in 2017-18 of £51,890 and bank interest of £ 620.His personal allowance for the year is £11,5 00.ComputeErnest's income tax
Ivan's income for the tax year 2017-18 is as follows:Part-time salary £15,985 Net interest on gilt-edged securities £1,360 Premium bond prize £50 Dividends £18,560 His personal allowance for 2017
Mary's income for tax year 2017-18 consists of business profits of £26,920, dividends received of £124,460 and rents received of £3,750.Her personal allowance for the yearis £nil. Calculate
Ben (who is not a Scottish taxpayer) has business profits of £110,520 in 2017-18. He has no other income and makes no Gift Aid donations or pension contributions . Calculate the amount of his
A husband and wife both claim the basic personal allowance in 2017 -18. The husband's total income for tax purposes is £10,4 00 and the wife's income is £30,000. None of their income is derived
Calculate the MCA available for 2017-18 in the following situations: Husband (a) Born 5 July 1938, income 19,100 (b) Born 3 May 1933, income 28,110 (c) Born 4 June 1934, income 39,480 (d) Born 16
Calculate the MCA available in 2017-18 to a husband and wife (both born in August 1934)who each have an adjusted net income not exceeding £28,000 and who marry on:(a) 23 June 2017(b) 4 April 2018
Calculate the income tax liability for 2017-18 of a husband and wife (both born in March 1935) given the information shown below. In each case, an election has been made for 50% of the tax reduction
Calculate the basic personal allowance available in 2017-18 to a taxpayer with adjusted net income of:(a) £90,000 (b) £108,000 (c) £130,000.
Pamela's salary in 2017-18 is £105,000. She has no other income for the year and she is not a Scottish taxpayer.(a) Calculate her income tax liability for 2017-18.(b) Re-calculate her income tax
Calculate the married couple's allowance available to the following couples in 2017-18, assuming that they were married before 5 December 2005 and that they have not elected for MCA to be claimed by
the information shown below. No elections have been made in relation to the married couple's allowance and none of the income is derived from savings or dividends.(a) Married in 1956; husband's
Toby is a widower. He was born in August 1932. His wife was born in June 1933 but she died in March 2017. Toby's income for 2017-18 is as follows: 10,480 912 Retirement pension Income from purchased
Brian and Danny are civil partners. They were both born in 1974 and they both claim the basic personal allowance for 2017 -18. Brian's total income for 201 7-18 is £25,000 and Danny's total income
Richard was born on 5 April 1935. His wife, Patricia, was born on 5 October 1938. They were married in 1968. Their income for 2017-18 is as follows: Richard: Business profits Patricia: Dividends
A married man (born 3 November 1934) died on 8 July 2017 . He received a retirement pension of £12,7 30 between 6 April 2017 and the date of his death. His wife (born 12 August 1940) had no income
Bill was born in 1978. He is married to Hazel who was born in 1982. Neither of them is a Scottish taxpayer. In 2017-18, Bill had business profits of £47,550 and received dividends of £5,200. Hazel
(a) Bob has total income of £ 21,445 in 2017-18. None of his income is derived from savings or dividends and he claims the basic personal allowance. During the year he makes a payment which is
Derek's total income for 2017-18 is £63,310 (entirely non-savings) and he makes a gross deductible payment of £3,000 in the year. He is not a Scottish taxpayer and he makes no Gift Aid donations or
Esmé receives dividends of £17,000 in 2017-18 and has no other income. She makes a gross deductibl e payment of £10 0 during the year and claims only the basic personal allowance. Calculate
In 2017-18, a taxpayer who pays income tax at 45% and capital gains tax at 20 % gives listed shares with a market value of £20,000 to a charity. There are no incidental costs of disposal and the
In 2017-18, Owen (who is not a Scottish taxpayer) makes qualifying Gift Aid donations totalling £360. He has no capital gains tax liability for the year. Show his income tax computation if his only
Mabel has total income of £26,205 in 2017-18, none of which is derived from savings or dividends. During the year she makes a net deductible payment of £200. Show her income tax computation for the
Paul (who is not a Scottish taxpayer) has total income of £4 8,890 in 2017-18, none of which is derived from savings or dividends. During the year he pays gross eligible interest of £1,600. Show
Rose is single and has total income of £11,250 in 2017-18. She makes a gross deductible payment of £25 during th e year. Show her income tax computation for the year and determine the amount of tax
At what rate of income tax is each of the following types of payment relieved in tax year 2017-18?(a) interest on a qualifying home loan used to buy an annuity(b) interest on a loan used to buy an
A taxpayer with no capital gains tax liability makes a qualifying Gift Aid donation of£960 in tax year 2017-18. Explain:(a) why this donation is worth more than £960 to the charity which receives
In 2017-18, Raj has dividend income of £58,400. He has no other income. He makes a qualifying Gift Aid donation of £ 440 during the year. Show his 2017-18 income tax computation.
Matthew (who was born on 1 May 1934) dies on 23 December 2017. His only income in tax year 2017 -18 is a retirement pension of £2 9,260. H e made a Gift Aid donation of£200 in July 2017. His wife
Pauline (born May 1937) marries Adrian (born March 1935) on 17 October 2017 . Their income for 2017-18 is as follows:During 2017-18, Adrian pays maintenance of £4 ,000 to his former wife, as
Geoffrey's income for 2017-18 consists of a salary of £114,600 and dividends received of £4,400. He makes qualifying Gift Aid donations of £7,200 during the year . He is not a Scottish
Ryan owns a house which he lets to a tenant. Rent is payable monthly in advance on the 6th day of each month. For some years the rent has been fixed at £7,200 per annum but this was increased to
Ursula owns a flat which was let to a tenant for the whole of tax year 2017-18 at a rental of £200 per week. Her expenditure during the year was as follows:The new sofa is superior to the sofa it
Sandra's entire income is derived from the letting of proper ty. Her income and expenditure in tax years 2015-16 through to 2017-18 are as follows: 2015-16 49,320 78,510 Total rental income Total
In tax year 2017-18, a landlord receives a premium of £36,000 when granting a 25-year lease to a tenant. How much of this premium is chargeable to income tax?

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