Past Paper Analysis (Questions on Practice Platform)

S.No Paper Name Question Name Requirements Topic Tested

Prepare the memorandum as requested in the email from your manager. The following
marks are available:
(a) Becoming tax advisers to the Jeg Ltd group of companies.
Jeg Ltd
(b) Relieving the chargeable gain on the sale of Kod Ltd’s business premises.
(c) Taxation of profits generated overseas.
(d) Value added tax (VAT).
You should assume that today’s date is 1 September 2021.
Carry out the work required as requested in the email from your manager. The following
marks are available:
Lucille
(a) Lucille’s financial position for the tax year 2021/22.
(b) Overseas income and gain on investment property.
(c) Trust to be created for the benefit of Lucille’s nieces.
(a) Calculate, with supporting explanations, the income tax saving for Sabin if he claims
terminal loss relief ONLY for the trading losses arising in his final two trading periods.
ATX-UK (b) Explain the capital gains tax (CGT) implications for Sabin arising from the sale of the
September/December business premises and specialist machine to Patan Ltd, and calculate the amount
1 Sabin and Patan
2021 exam (21/22 available to Sabin from the sale of these assets, after paying any CGT liability arising.
syllabus) (c) Explain the tax deductions and reliefs available to Patan Ltd in the year ending 31
March 2022 in respect of (1) the acquisition of the new factory, and (2) the expenditure on
research and development.
(a)(i) Explain, with supporting calculations, the capital loss which will arise on the
proposed sale of the antique chairs to Nathi and how this loss can be relieved.
(a)(ii) Advise on the availability and effect of the instalment option for payment of Nathi’s
inheritance tax liability in respect of each of the investment property and the antique
chairs, on the assumption that Caden dies on 20 March 2026.
Note: No calculations are required for part (a)(ii).
Caden and Amahle
(b) Calculate Caden’s taxable income for the tax year 2021/22 on the basis that the
personal services company (IR35) legislation applies to the budgeted fee income
receivable by Mandini Ltd in the year ending 31 March 2022.
(c) For the tax year 2021/22, advise Amahle why the interest receivable in respect of her
bank account in the country of Komor will be subject to UK income tax and explain, with
supporting calculations, why this will not actually result in any UK tax payable.
 You should assume that today’s date is 1 February 2023.
Prepare the memorandum as requested in the email from your manager. The following
marks are available:
(a) Becoming tax advisers to Olma.
Olma.
(b) Sale of shares in BG Ltd.
(c) Cafe business.
(i) Voluntary registration for the purposes of value added tax (VAT).
(ii) Loss planning.
(a) Hogan’s income tax liability for the tax year 2022/23.
(b) Award of free shares from VPR plc’s share incentive plan (SIP).
Hogan
(c) Sale of Sea Breeze Cottage.
(d) Gift of £380,000 to a discretionary trust on 1 July 2023.
(a)(i) Calculate the chargeable gain arising on the assignment of the lease on 1 October
2021 and explain the tax treatment of the deferred gain in respect of the sale of the office
building.
(a)(ii) In relation to the chargeable gain calculated in (a)(i), explain, with supporting
calculations:
ATX-UK March/June 2022 Fox Ltd .the extent to which rollover relief will currently be available within the Fox Ltd group; and
2
(22/23 syllabus) .the minimum amount which Fox Ltd will need to spend on the new freehold factory,
such that the full amount of the eligible gain in (a)(i) can be deferred using rollover
relief.
(b) Explain the group relief claims available to the Fox Ltd Group in respect of Salas
Ltd’s trading loss of the year ending 30 June 2022.
You should assume that today’s date is 1 June 2022.
(a) Explain the circumstances under which the maximum liability to inheritance tax (IHT)
will arise in respect of Luis’ planned gift of Ivy Cottage to Silvia and calculate the amount
which would be payable by Silvia in this situation.
(b)(i) Explain the immediate income tax and capital gains tax implications of Luis’ sale of
his Flores Ltd shares; and
Luis (b)(ii) State the relief(s) available for the capital loss arising on this sale, including the
rate of tax saved in respect of each relief, and advise Luis of the most tax-advantageous
relief available to him.
(c)(i) Explain the income tax treatment for Luis of the receipt of the bank interest and
payment of the mortgage loan interest, and
(c)(ii) Calculate the after-tax net interest saving for a full tax year if he decides to repay
the mortgage loan.
 Prepare the memorandum as requested in the email from your manager. The following
marks are available:
(a) Hum Ltd – refund of corporation tax.
Hum Ltd group (b) Sale of the two buildings.
(i) Tax implications.
(ii) Post-tax proceeds available to the Hum Ltd group.
(c) UK taxation of the profits generated by the Qua Co trade.
Carry out the work required as requested in the email from your manager. The following
marks are available:
(a) Inheritance tax (IHT) payable by Riccia as a result of her uncle’s death.
Riccia
(b) Riccia’s tax resident status for the tax year 2022/23.
(c) Sale of the painting and the bracelet.
(d) Choice of accounting date for the unincorporated business.
(a)(i) Explain the income tax adjustments required to the trading profit for the three-
month period ending 30 September 2022 in respect of the disposal of the
specialist fixed machine and the planned disposal of the warehouse.
(ii) Calculate Yaqui’s taxable trading profit in respect of YP Trading for the tax year
2022/23, assuming the warehouse is sold as planned on 30 September 2022.
(b)(i) Explain the capital gains tax implications for Yaqui of selling the specialist fixed
ATX-UK machine on 10 July 2022 . Your answer should include an explanation of the tax
3 September/December Yaqui treatment of the chargeable gain of £11,000 which was deferred on the
2022 (22/23 syllabus) acquisition of this machine.
(ii) Explain whether or not business asset disposal relief (BADR) would be available
to Yaqui if he sells the warehouse on 30 September 2022 as planned, and
calculate the chargeable gain which would arise.
(c) Explain the VAT capital goods scheme consequences for Yaqui if:
(i) he sells the warehouse as planned on 30 September 2022; or, alternatively
(ii) he starts to rent out the warehouse to unconnected tenants from 1 October 2022
(a) Explain, with supporting calculations, the income tax implications for Tula in the tax
year 2022/23 in respect of:
the interest paid on the £20,000 loan she will take out from the bank; and
the interest received on the £80,000 loan she will make to Belleza Ltd.
(b) Explain, with supporting calculations, Aros’ additional income tax liability (if any)
for the tax year 2022/23 as a result of the provision of the van and the computer by
Tula Belleza Ltd.
(c) In respect of Tula’s planned sale at undervalue of Belleza Ltd shares to Aros:
(i) Explain whether or not business property relief (BPR) will be available if Tula dies
within seven years of this sale.
(ii) Explain, with supporting calculations, Aros’ potential liability to inheritance tax
(IHT) on the assumption that Tula dies on 1 January 2028 and BPR is NOT
available.
 (a)Refund of income tax (Exhibit 1)Summarise the actions which our firm should take, including the
matters which we should bring to Hiromi’s attention in relation to the refund she has received
gains you should ignore any relief which may be available to her in respect of her trading loss.–
Calculate the capital gains tax (CGT) payable by Hiromi as a result of the sale of the rental property

(c)Trading loss (Exhibits 1 and 2)For the purposes of this part (c) you should IGNORE terminal
loss relief and national insurance contributions.(i)Calculate Hiromi’s budgeted trading loss for the
Hiromi tax year 2023/24 and state how the loss can be relieved.(ii)Using the loss calculated in part (i):(1)
Explain, with supporting calculations, the tax savings which would result from the following two
alternatives:– relieving the loss as soon as possible assuming that NO relief is claimed in respect of
the tax year 2023/24;– relieving the loss in the future.(2) Set out the matters we should draw to
Hiromi’s attention in order to help her decide on how to relieve the loss.
(d)When HKR Ltd owns the business (Exhibit 2)– Explain with supporting calculations, the tax
implications for HKR Ltd and Hiromi of HKR Ltd paying a dividend of £7,000 in the tax year 2025/26.–
State the matters you would draw to Hiromi’s attention in relation to the requirement for HKR Ltd to
maintain and retain the records relating to its business activities
(a) Explain the corporation tax treatment for Silves Ltd in the year ending 31 March 2023 in relation to
the acquisition of each of the two assets.
(b)(i) Explain, by reference to the relief(s) available for the forecast trading loss, why it will be
ATX-UK June 2023 (23/24
4 advantageous for Evora Ltd to commence trading in Salema through a permanent establishment (PE)
syllabus)
rather than an overseas subsidiary company.

(b)(ii) State the tax consequences for Evora Ltd of making an election to exempt the profits of
Evora Ltd
overseas PEs from UK corporation tax, and advise the company whether or not it will be beneficial to
make this election on the basis of the company’s current forecast results, and its future plans.
(c) Explain how the following items will be reported on Evora Ltd’s value added tax (VAT) return for
the quarter ending 30 June 2023:
.the services purchased from the overseas legal firm; and
.the goods acquired from the overseas supplier.
State how these transactions will affect the amount of VAT payable declared on this return.
(a) Explain the capital gains tax and inheritance tax (IHT) implications of the proposed gift of the
painting to Violette on 1 August 2023.
(b) In relation to Anya’s proposed gift of the Chaski Ltd shares to Cara on 1 September 2023:
(i) Advise on the availability to Anya of gift holdover relief, and any consequences for Cara of this relief
being claimed.
Anya
(ii) Advise on the availability of business property relief in calculating the IHT liability on this gift as a
result of Anya’s death, and any additional conditions for Cara attaching to this relief.

(c) Calculate the reduction in Anya’s post-tax income for the tax year 2023/24 as compared with the
tax year 2022/23, on the assumption that she gifts all of her shares in Chaski Ltd to Cara as planned.
 (a)Rij Ltd – corporate matters (Exhibit 1)Prepare a memorandum for the client file which should
address the following issues.(i)Post-tax cost of the planned researchI can confirm that Rij Ltd is a small
or medium-sized enterprise for the purposes of the relief available in respect of research and
development costs and that the research to be carried out will qualify for any additional tax
deductions available.– Calculate the post-tax cost of the budgeted research and development
expenditure of £150,000.You should ignore both the interest payable on the loan and national
insurance contributions.(ii)Tax relief in respect of the interest payable on the loan– Explain, by
reference to the loan relationships rules, how much of the interest payable on the proposed
loan will be deductible for corporation tax purposes for the year ending 30 September
2024.(iii)Relieving Sta Ltd’s trading loss brought forward– Explain the extent to which Sta Ltd’s
budgeted loss carried forward, as at 1 October 2023, can be relieved against the profits of Sta Ltd
and/or Rij Ltd for the year ending 30 September 2024 and summarise your findings.(iv)Refund of
corporation tax– Summarise the matters which we should consider in relation to the refund
received by Rij Ltd.
Rij Ltd
Ella – personal matters (Exhibit 2)Prepare paragraphs to be included in a letter to Ella which should
address the following issues.(i)Sale of commercial building in the country of BureeaI can confirm that
Ella is domiciled in the UK. She was non-UK resident for the period from 6 April 2020 to 5 April 2023.
From 6 April 2023 to 30 September 2023, Ella has no ties to the UK for the purposes of determining
her tax residence status. In addition, Ella’s only income which will be subject to UK income tax in the
tax year 2023/24 will be her salary from Sta Ltd.
– Explain, by reference to Ella’s residence status for the tax year 2023/24, why the sale of the
commercial building would NOT result in a UK capital gains tax (CGT) liability if Ella were able to sell
the building prior to her return to the UK.Your analysis of Ella’s tax residence status will need to
ATX-UK September 2023
5 take account of the workings of the split year basis.– Calculate the CGT which would be saved as a
(23/24 syllabus)
result of this strategy.
(ii)Inheritance tax (IHT) payable in respect of the gift of land– Calculate the IHT payable by Ella as a
result of the death of her grandmother.You should include an explanation of the relevance of the
gift to Ella’s brother on 1 March 2014.
(a)(i) Explain whether or not business asset disposal relief will be available on the sale of the
warehouse; and
(a)(ii) Calculate Logan’s total after-tax proceeds (before taking account of the impact of his additional
pension contribution) from the sale of the warehouse and fixed machine.

Logan (b) Calculate, with supporting explanations, the reduction in Logan’s income tax liability for the tax
year 2023/24 as a result of investing the additional £28,000 cash into his personal pension scheme.
(c)(i) State, with reasons, the additional information which will be required to determine whether the
conditions for the new UK cottage to qualify as a furnished holiday letting are satisfied.
(c)(ii) Explain ONE specific tax advantage which would be relevant for Logan if the cottage does qualify
as a furnished holiday letting.
(a) Explain the availability of the nil rate band and residence nil rate band when calculating the value
of Mucuna’s chargeable estate on death.
(b) Calculate Sieva’s after-tax proceeds in respect of the planned sale of her shares in Lima Ltd to
Roman, on the assumption that any available relief(s) are claimed. Briefly state the reason for the rate
Sieva
of capital gains tax which will be charged on this sale.

(c) Explain how leaving the flat rate scheme would affect the way in which the amount of value added
tax (VAT) payable by Sieva to HM Revenue and Customs (HMRC) for each VAT period is calculated.
 (a)Becoming tax advisers to JakeI have not identified any threats to compliance with the fundamental
principles of professional ethics which would arise as a result of becoming tax advisers to Jake.–
Explain why it is important that we contact Jake’s previous tax advisers.– State any other actions we
should take before we agree to become Jake’s tax advisers.
ignore the alternative plan for the use of the Yak Building and simply assume that the whole of the
Yak Building will be used for the purposes of carrying on Jake’s unincorporated business. You should
also ignore value added tax (VAT).(i)Insurance proceeds available for investment in the business(1)On
the assumption that the construction of the Yak Building will be completed and paid for on 1
February 2024:– explain the relief available to Jake in respect of the chargeable gain resulting
from the destruction of the Vol Building.(2)On the assumption that Jake claims the relief you have
identified in (1), and will have total income in the tax year 2023/24 of £30,000:– calculate the
amount of post-tax insurance proceeds which will be available, after the construction of the
Yak Building, for investment in the new business.(ii)Tax deductions in respect of the expenditure to
be incurred– Explain when, if at all, Jake will be able to obtain a tax deduction for the costs he is likely
to have incurred in respect of visiting potential customers.– Explain the tax deductions which will be
available in Jake’s first trading period ending on 30 April 2025 in respect of the costs of:– the
Jake
that the alternative plan for the use of the Yak Building is followed.I can confirm that the supplies to
be made by Jake’s unincorporated business will be wholly standard rated for VAT purposes. However,
due to the application of the capital goods scheme, Jake’s ability to recover the full £67,000 of input
tax over the life of the building will be restricted unless he opts to tax the building.– Calculate the
maximum amount of ADDITIONAL input VAT which Jake could recover if he were to elect to
opt to tax the Yak Building on 1 May 2024. Your calculations should indicate the years in which
the input tax would be recovered.
ATX-UK December 2023
6 (c)Sale of shares in POL Ltd (Exhibit 2)On the assumption that Jake sells the POL Ltd shares in the tax
(23/24 syllabus)
year 2024/25 for £470,000, and that his aunt dies between now (1 January 2024) and 31 December
2026 (i.e. within seven years of the potentially exempt transfer):– Explain, without carrying out any
calculations, Jake’s potential liability to inheritance tax (IHT) at the time of the sale of the shares and
on the subsequent death of his aunt. – Calculate the chargeable gain resulting from the sale,
before the deduction of any available reliefs, and explain whether or not the following reliefs
would be available:– business asset disposal relief; and – rollover relief.– Explain the
relief which would be available in respect of any IHT payable following the death of Jake’s aunt.
(a) In relation to Rabo Ltd’s sale of the freehold factory: − Calculate the a er-tax proceeds; and −
Explain how the base cost of this factory is calculated.
(b) (i) Explain the maximum possible amount of Rabo Ltd’s trading loss for the year ending 31
December 2023 which can be transferred to Morada Ltd; and
(b) (ii) Explain the tax consequences for Rabo Ltd of using some, or all of the loss itself, and explain
Rabo Ltd
any potential issues associated with such a course of action.
(c) Explain with supporting calculations:
. The rollover relief and capital allowances which may be claimed as a result of the planned capital
acquisitions on 1 June 2024; and. The total corporation tax savings which these will give rise to in the
year ending 31 December 2024.
(a) Assuming that Pinto does not satisfy any of the automatic tests in relation to tax residence,
explain whether or not he will be resident in the UK for tax purposes in the tax year 2023/24.
(b) Explain, by reference to Pinto’s tax residence status, why the sale of his house in the UK on 30 April
Pinto
2022 will have been subject to UK capital gains tax, and calculate the chargeable gain arising. You
should include an explanation of any relief(s) available. (c) Calculate Pinto’s property income, after all
taxes, in respect of his house in Vicia for the tax year 2024/25.
 preparing for a meeting with Rosetti. When carrying out this work you should note that the Lark Ltd
group claims all possible tax deductions and deferrals in respect of both tangible and intangible assets
as soon as possible.The memorandum should cover the following matters:(i)Sale of STV Ltd (Exhibit
1)You should ignore value added tax (VAT) when carrying out this task (i).(1) Tax implications of the
saleIn respect of Option 1:– Explain the corporation tax implications for Lark Ltd of a sale of the
shares.In respect of Option 2:– Explain the corporation tax implications for STV Ltd and the
stamp duty land tax implications of a sale of the Strick Building; and – Calculate the taxable profit
resulting from a sale of the ‘S’ trademark.(2) In order to assist Rosetti in deciding on which option to
proceed with:– Prepare calculations to show which option would generate the greater amount
of post-tax proceeds for Lark Ltd.– In respect of both options, set out any other tax and/or
commercial matters directly related to this proposed sale which we should draw to Rosetti’s
group VAT registration and that the UK tax resident companies in the group make standard rated
supplies only. However, Rosetti will need to resolve certain administrative issues before the
application can be finalised, such that the group registration will not be in place until 1 May 2024.–
Explain which of the companies in the Lark Ltd group could be included within a group VAT
Lark Ltd group registration with Lark Ltd.– On the assumption that the sale of STV Ltd is carried out in
accordance with Option 2, explain why the sale of business assets would NOT qualify as a transfer of
a going concern (TOGC) and, consequently, whether or not STV Ltd would be required to charge VAT
on the sale of the Strick Building to VAR Ltd.
(iii)Reducing the corporation tax payable by the group companies (Exhibit 2)Pricing strategy– Explain
the corporation tax implications for the Lark Ltd group of adopting the pricing strategy suggested by
Rosetti.Strategy suggested by business adviserI have reviewed this strategy and concluded that it
would fall within the general anti-abuse rule (GAAR).– Distinguish between tax evasion and tax
avoidance and state the purpose of the GAAR.– Explain why the GAAR would apply to the
strategy suggested by Rosetti’s business adviser.(b)Rosetti – gifts of ordinary shares in Lark Ltd
ATX-UK June 2024 (24/25 (Exhibit 3)Write a memorandum for Rosetti’s client file. When carrying out this work you should
7 assume that:– On 1 May 2024 the market value of 1,500 shares in Lark Ltd will be £27,000.– Rosetti is
syllabus)
a higher rate taxpayer and business asset disposal relief will be available in respect of the gifts.For
each of the two proposed gifts:– Explain whether or not gift holdover relief will be available.–
Calculate Rosetti’s capital gains tax (CGT) liability (if any), and the recipients’ CGT base cost in
the shares received.
(a)(i) Explain the relief available in respect of the lifetime gift made by Fiera to Perla, as a result of
Fiera’s death.
(a)(ii) Calculate the amount of Risa’s inheritance from Fiera’s death estate, after deducting any
inheritance tax payable. You should include an explanation of the relief available to reduce the
taxable value of the estate.
(b)(i) State the options available to Risa to relieve her share of the loss of Perro & Co for the year
Risa
ended 31 March 2024, on the assumption that she does not wish to carry any of this loss forward.
(b)(ii) Explain which of the available options for relieving the loss (as identified in (i) above) will result
in the highest income tax saving for Risa, and calculate the amount of this tax saving.
(c) Explain how income tax relief will be given for the interest payable on the loans taken out by Risa
on 6 April 2024, and calculate the total amount of any income tax saving for the tax year 2024/25 in
respect of this relief.
(a)(i) Calculate the amount of UK income tax Iker would have to pay in respect of his overseas
property income for the tax year 2024/25 on the assumption that it will be taxed on the arising basis.
(ii) Explain whether or not Iker is eligible to claim for his overseas property income to be taxed on the
remittance basis.
 Iker status, why the disposal of Painting 1 will be subject to UK capital gains tax (CGT); and (ii) Explain
whether it would be preferable for Iker to gift Painting 2 on 1 April 2025 or 1 May 2025 in order to
(c) Calculate the additional disposable income available to Iker for the tax year 2025/26 as a result of
being provided with living accommodation by Laudio Ltd. You should include an explanation of your
treatment of the expenditure on the construction of the conservatory.

(a)Corey'sUKresidencestatusforthetaxyear2024/25(Exhibit1)Explain how Corey's UK residence status

for the tax year 2024/25will be determined and concludeon his
likelyresidencestatusforthatyear.Ihavealreadyconfirmedthatnoneofthe automatic overseas or
automatic UK testhave beenmetfor 2024/25and youtherefore DO NOT need to consider these further
State how becoming UK resident would affect Corey's liability to UK in come tax .For the purposes of
this part, you are NOT required to consider the availability of split year treatment.
(b)Corey's disposals of assets in the tax years 2023/24 and2024/25(Exhibits1and2)For this part of the
work, you should assume Corey is UK resident for the whole of the tax year 2024/25 and will receive
taxable in come in that year of £42,320, before deduction of his personal allowance.Explain how each
of Corey's disposals in the tax year 2023/24 will be treated for the purposes of capital gains tax
(CGT).Calculate Corey's CGT liability for the tax year 2024/25.
(c)LifetimegiftsofpaintingsbyEmer(Exhibit3)
Explain, with respect to the amount of inheritance tax(IHT) payable ONLY,whether it would be
Corey beneficial for Emerto makea lifetime gift of either or both of her paintings (as opposed to retaining
them until her death).There is no need to address the annual exemption,as Emer makes use of this
every year.You should assume there will be no nil rate band available regardless of when the
ending 31 March 2026, explain whether you agree with the advice given by his friend concerning
the tax treatment of the proposed purchase of the Cloque brand (an intangible fixed asset) for
£35,000.Explain the tax deduction which will be available to Quod Ltd in respect of the scientific
research costs of £74,500 to be incurred in the year ending 31 March 2026.Calculate the amended
budgeted taxadjusted trading loss for Quod Ltd for the year ending 31 March2026, taking into account
the explanations requested above.Explainhowmuchof Quod Ltd's amended budgeted tradingloss will
ATX-UK Practice Paper 1 be available for use by Porth Ltd.
8
(FA2023)
(e) Refund of income tax: I have become aware that, a few months ago, Corey received a refund
of income tax from H M Revenue and Customs (HMRC) in respect of the tax year 2020/21. He has
not been able to determine why the refund was made.In respect of the income tax refund, set out
the actions which our firm should take and the matters which should be brought to Corey's attention.
(a) (i) On the assumption that Tomas prepares his first set of accounts to 31 March 2025, explain,
with supporting calculations, the difference in the total amount of tax payable by him for the tax year
2024/25 as a result of the profit on the sales of sporting memorabilia being treated as trading income,
rather than chargeable gains.
(ii) Explain briefly the payments that must be made by Tomas under self-assessment in respect of his
trading income for the tax year 2024/25.
Tomas and Ines
(b) (i) Explain TWO matters which Tomas should consider when deciding whether or not it will be
financially beneficial to voluntarily register for VAT.
(ii) Assuming Tomas DOES voluntarily register for VAT, explain the implications of purchasing advice
from the overseas supplier, rather than using one based in the UK.
(c) Explain the tax implications for Ines of her intended sale of the Tavira Ltd shares on 1 June 2024,
and calculate her after-tax proceeds from this sale.
(a) Explain the inheritance tax implications of the gift of the cottage to Pedro at the time the gift was
made, and as a result of Marina’s death.
 (b) Explain, by reference to the relevant conditions, why the holiday cottage will qualify as a furnished
Pedro holiday letting for the first 12-month period of letting.
the planned contribution of £85,000 (gross) into his personal pension scheme on 31 March 2025. Your
answer should include an explanation of the amount of the personal allowance available to Pedro in
this case.
(a) Liquidation of VNL Ltd (Exhibit 1)(i) Sale of intangible fixed assetsCalculate the post-tax proceeds
for VNL Ltd as a result ofthe sale of the intangiblefixed assets.(ii) Timing of payments to
shareholdersExplain the tax rates, taking into account any reliefs which may be available,which the
shareholders will pay on the amounts received fromVNL Ltd, depending on when the payment is
made.
how Joe could obtain relief for his trading lossof £24,500. He does not wish to carry his loss forward if
at all possible.–Conclude on the most beneficial method of relief and calculate the tax that would be
saved.Note: You should ignore the expenditure incurred prior to 1 November 2024 and you should
ignore national insurance contributions and VAT.(ii)Costsalready incurred and the business premises
VNL Ltd Explain whether or not Joe will be able to recover the related input tax forvalue added tax(VAT)
purposes in respect of the consultancy costsalready incurred and the planned purchase of the
business premises.
(c)Becoming Fiona’s tax advisers (Exhibit 3)Explain the actions which we should carry out before we
become Fiona’s tax advisers. Ihave already obtained proof of her address and her identity.
(d) Taxation of overseas income (Exhibit 3)–Explain why the remittance basis will be available to Fiona
in the tax year 2025/26 and whether or not she will be subject to the remittance basis
ATX-UK Practice Paper 2 charge.–Calculate Fiona’s income tax liability for the tax year 2025/26 based on her anticipated
9 income figures.The notes which you prepare will subsequently be distributed to all team members
(FA2023)
within our firm, so please do present them in a way which will be suitable for circulation.
(a) Explain, with supporting calculations, the total additional taxes payable by Samphire Ltd:
(i) If Samphire Ltd gifts the computer to Nori (Alternative 1);
(ii) If Samphire Ltd makes a loan of £1,500 to Nori, and then writes off the loan on 6 April 2026
Samphire Ltd and Kelp (Alternative 2).
Ltd (b)(i) Calculate the chargeable gain for Kelp Ltd on the sale of the lease on Factory 1.
(b)(ii) Explain, with supporting calculations, the amount of the chargeable gain calculated in (b)(i)
which will remain liable to corporation tax (if any), if Kelp Ltd claims the maximum amount of rollover
relief available.
(a) Explain whether (1) a company share option scheme (CSOP) and (2) a share incentive plan (SIP) will
satisfy Yacon Ltd’s criteria for a tax advantaged share incentive scheme, and the income tax
implications for the employees of acquiring the shares in each case.
Yacon Ltd and Daikon (b) Calculate, with brief explanations, the private residence relief (PRR), and letting relief, which are
available to reduce the chargeable gain on Daikon’s sale of his house.
(c) Explain the inheritance tax implications of Jicama’s gift of the apartment to Daikon on 5 June 2022,
if Jicama were to die in December 2027.
(a) It is anticipated that Farina and Lauda will require some highly sophisticated and specialised tax
planning work in the future.
Set out the information that would be required, and the action(s) that should be taken by the firm
before it agrees to become tax advisers to Farina and Lauda.
Farina and Lauda (b) Prepare the memorandum requested in the email from your manager. The following marks are
available.
(i) Capital allowances.
(ii) Farina.
 (iii) Lauda.
Carry out the work required as set out in the email from your manager. The following marks are
available.
(a) Brawn Ltd – Review of the corporation tax computation.
Forti Ltd (b) Other corporate matters.
(i) Close companies
(ii) Note 6 to the schedule.
ATX-UK Specimen FA2021 (c) Value added tax (VAT) annual accounting scheme.
10
– applies to M23 session (a) Explain the availability and operation of rent-a-room relief in relation to Kesme and calculate his
taxable income for the tax year 2021-22 on the assumption that the relief is claimed.
(b) State, with reasons, whether or not the remittance basis is available to Kesme and/or Soba and,
on the assumption that it is available to both of them, explain whether or not it is likely to be
Kesme and Soba beneficial for each of them.
(c) Calculate the value of the residue of the estate that Soba would receive under Kesme’s will if
Kesme were to die today.
(d) Explain how the spouse exemption available in respect of the transfers from Soba to Kesme
would be different if Soba were domiciled in the UK.
(a) (i) Calculate the trading loss for the tax year 2021/22, and the terminal loss on the cessation of
Spike’s unincorporated business.
(ii) Explain the reliefs available in respect of the losses calculated in part (a)(i) and quantify the
Spike potential tax savings for each of them.
(b) State the value added tax (VAT) implications of the cessation of the business and the sale of
the business assets.
(c) Explain the income tax implications for Spike of the relocation payment.
(a)Knowledge obtained from advising other clientsWe have many existing clients which trade from
permanent establishments situated overseas, and a few years ago we had a client with a presence in
the country of Garia.—Identify the points which should be made in order to explain the extent to
which REP Ltd can benefit from the knowledge our firm has gained from advising other clients.
of the country of residency of JAY Ltd in relation to:—the amount of corporation tax payable in
the UK and Garia in respect of its profits; and—the relief available to REP Ltd if JAY Ltd’s business in
Garia were to make a trading loss.Before you start, take some time to identify the different
possibilities which need to be addressed, recognising that it is not yet known what percentage of JAY
Ltd will be owned by REP Ltd.
(ii)Election to exempt the profits of JAY Ltd’s overseas permanent establishment from UK tax.—List
the implications of JAY Ltd making this election.
(iii)Controlled foreign company (CFC) rules.I can confirm that a CFC charge will not arise if JAY Ltd is
resident in Garia. However, I want to provide Lamar with:—an explanation of the purpose of the CFC
REP Ltd
rules and the charge which can be levied under them.
(c)Purchase of investment property by REP Ltd (Exhibit 1).—Explain how opting to tax the building
would enable REP Ltd to recover the value added tax (VAT) charged by the vendor; and—Explain
whether or not the advice from Lamar’s friend is correct.There is no need for you to consider partial
exemption or the capital goods scheme.
(d)Personal tax affairs (Exhibit 2).(i)Cessation of Freya’s business on 31 March 2025.—A calculation of
Freya’s estimated liability to income tax and Class 4 national insurance contributions in respect of her
ATX-UK Specimen final tax year of trading.
 ATX-UK Specimen
11 FA2023 – applies from J23
session onwards (ii)Proposed gift of shares to trust on 1 November 2024.—A calculation of the inheritance tax which
would be payable by Freya if she were to give 20,000 shares in Dexil Ltd to the trust on 1 November
2024, as planned. Your calculation should indicate the availability or otherwise of all relevant annual
exemptions.—The payment date, together with a brief explanation of how it has been determined.
(a)(i)State the reliefs available to Amelia in respect of her trading loss of the year ending 31 March
2025, on the assumption that Amelia does not wish to carry forward any of the loss.
(a)(ii)Explain,with supporting calculations,how much tax would be saved for each of the reliefs
identified in requirement (a)(i).
Amelia
(b) Explain,with supporting calculations,the capital gains tax and income tax implications for Amelia of
the proposed sale of Warehouse 1, and the acquisition of Warehouse 2 and the fork lift truck.
(c)Explain why Amelia can apply to voluntarily deregister for value added tax (VAT) purposes on
31 March 2025, from what date her VAT registration would be cancelled,and the immediate
consequences for her of deregistering.
(a)ExplainwhyTaupe Ltdisclassedasaclosecompany.
(b)Explain,with supporting calculations,the tax implications for both Dorian and Taupe Ltd, if Dorian
repays the £7,500 loan on 30 April 2026 rather than on 30 June 2026.
Dorian and Taupe Ltd (c)Explain, with supporting calculations, which of the two alternatives for providing assistance
with travel costs,wil lproduce the lower over all cost for Dorian.
(d)State, with reasons, the due date for filing Taupe Ltd’s corporation tax return for the year ended 30
April 2023,and the implications for Taupe Ltd in respect of filing it late.