On 1 July 2014, Sameer made a cash gift of ￡2,500 ...

第1题

Mr Li, a photographer, had his photos published in the July 2014 edition of the tourism jo

urnal. The total fee was RMB20,000 and the publisher agreed to pay Mr Li by two instalments, one of RMB18,000 in June 2014 and the balance of RMB2,000 in August 2014. The same photos were republished by the government in a promotion brochure in August 2014 and Mr Li was paid a further fee of RMB3,000 by the government.

What is the total amount of individual income tax (IIT) which Mr Li will pay on the above incomes？

A.RMB2,492

B.RMB2,576

C.RMB2,548

D.RMB3,680

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第2题

Manco has been experiencing substantial losses at its furniture making operation which is

treated as a separate operating segment. The company’s year end is 30 September. At a meeting on 1 July 2010 the directors decided to close down the furniture making operation on 31 January 2011 and then dispose of its non-current assets on a piecemeal basis. Affected employees and customers were informed of the decision and a press announcement was made immediately after the meeting. The directors have obtained the following information in relation to the closure of the operation:

(i) On 1 July 2010, the factory had a carrying amount of $3·6 million and is expected to be sold for net proceeds of $5 million. On the same date the plant had a carrying amount of $2·8 million, but it is anticipated that it will only realise net proceeds of $500,000.

(ii) Of the employees affected by the closure, the majority will be made redundant at cost of $750,000, the remainder will be retrained at a cost of $200,000 and given work in one of the company’s other operations.

(iii) Trading losses from 1 July to 30 September 2010 are expected to be $600,000 and from this date to the closure on 31 January 2011 a further $1 million of trading losses are expected.

Required:

Explain how the decision to close the furniture making operation should be treated in Manco’s fi nancial statements for the years ending 30 September 2010 and 2011. Your answer should quantify the amounts involved.

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第3题

On September 30, 2014, Microsoft announced Windows 10 as the successor to Windows 8.1. It was released on July 29, 2015, and addresses shortcomings in the user interface first introduced with Windows 8. Changes on PC include the return of the Start Menu, a virtual desktop system, and the ability to run Windows Store apps within windows on the desktop rather than in full-screen mode.英译中

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第4题

Section B – TWO questions ONLY to be attemptedYour client, Eric, requires advice on the ca

Section B – TWO questions ONLY to be attempted

Your client, Eric, requires advice on the capital gains tax implications arising from the receipt of insurance proceeds and the disposal of some shares, and the inheritance tax reliefs available in respect of assets in his estate at death. His son Zak requires advice regarding the application of the personal service company (IR35) legislation.

Eric:

– Is UK resident and domiciled.

– Is a higher rate taxpayer.

– Is in ill health and is expected to die within the next few months.

Capital transactions in the tax year 2014/15:

– Eric made no disposals for capital gains tax purposes in the tax year 2014/15 other than those detailed below.

– Eric received insurance proceeds of ￡10,000 following damage to a valuable painting.

– Eric sold half of his shareholding in Malaga plc for ￡11·50 per share.

Damaged painting:

– Eric purchased the painting for ￡46,000 in July 2012.

– The painting was damaged in October 2014 such that immediately afterwards its value fell to ￡38,000.

– The insurance proceeds of ￡10,000 were received by Eric on 1 December 2014.

– Eric has not had the painting repaired.

Malaga plc shares:

– Malaga plc is a quoted trading company with 200,000 issued shares.

– 80% of Malaga plc’s chargeable assets have always been chargeable business assets.

– Eric was given 12,000 shares in Malaga plc by his sister on 1 April 2010, when they were valued at ￡126,000.

– Eric’s sister had purchased the shares for ￡96,000 on 1 March 2009.

– Gift relief was claimed in respect of the gift of the shares to Eric on 1 April 2010.

– Eric paid the inheritance tax arising in respect of this gift following his sister’s death on 1 September 2011.

– Eric has never worked for Malaga plc.

– Eric sold 6,000 shares in Malaga plc on 1 March 2015.

Assets owned by Eric and a previous lifetime gift:

– Eric owns farmland in the UK, which has been leased to a tenant farmer for the last ten years.

– The farmland has a market value of ￡420,000 and an agricultural value of ￡340,000.

– Eric’s other assets, excluding the remaining Malaga plc shares, are valued at ￡408,000.

– Eric has made only one previous lifetime gift, of ￡60,000 cash to his son Zak on 1 July 2009.

Zak:

– Is the sole shareholder, director and employee of Yoyo Ltd, a company which provides consultancy services.

– In the year ended 31 March 2016, Yoyo Ltd’s gross fee income from relevant engagements performed by Zak will be ￡110,000.

– In the tax year 2015/16, Zak will draw a salary of ￡24,000 and dividends of ￡50,000 from Yoyo Ltd.

– Neither Yoyo Ltd nor Zak has any other source of income.

Required:

(a) Calculate Eric’s total after-tax proceeds in respect of the two capital gains tax disposals in the tax year 2014/15. (6 marks)

(b) (i) On the assumption that Eric dies on 31 March 2016, advise on the availability and effect (if any), of agricultural property relief, business property relief and quick succession relief in respect of the farmland and the retained shares in Malaga plc.

Note: You are not required to prepare calculations for this part of the question. (6 marks)

(ii) Explain, with the aid of calculations, the impact on the inheritance tax liability arising on Eric’s death if Eric does not die until 1 August 2016. (3 marks)

(c) Calculate Zak’s taxable income for the tax year 2015/16 if the personal service company (IR35) legislation were to apply to the fee income received by Yoyo Ltd. (5 marks)

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第5题

3 Damian is the finance director of Linden Limited, a medium sized, unquoted, UK trading c

ompany, with a 31 July

year end. Damian personally owns 10% of the ordinary issued share capital of Linden Limited, for which he paid

￡10,000 in June 1998. He estimates that the current market value of Linden Limited is ￡9 million and that the

company will make taxable profits of ￡1·4 million in the forthcoming year to 31 July 2007.

(a) Damian believes that Linden Limited should conduct its activities in a socially responsible manner and to this

end has proposed that in future all cars purchased by the company should be low emission vehicles. The sales

director has stated that several of his staff, who are the main recipients of company cars, other than the directors,

are extremely unhappy with this proposal, perceiving it as downgrading their value and status.

The cars currently provided to the sales staff have a list price of ￡19,600, on which Linden Limited receives a

bulk purchase discount of 6% from the dealer, and a CO2 emission rate of 168 grams/kilometre. The company

pays for up to ￡400 of accessories, of the salesmen’s own choice to be fitted to the cars and all of the running

costs, including private petrol. The cars are replaced every three years and the ‘old’ cars are sold at auction,

because they are high mileage vehicles.

The low emission cars it is proposed to purchase will have the same list price as the current cars, but the dealer

is only prepared to offer a bulk discount of 5% on these vehicles. Damian does not propose to make any other

changes to Linden Limited’s company car policy or practice.

Required:

(i) Explain the tax consequences of the proposed move to low emission vehicles for both the individual

salesmen and Linden Limited, illustrating your answer by means of relevant calculations of the tax and

national insurance (NIC) savings arising. (9 marks)

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第6题

3 You are the manager responsible for the audit of Volcan, a long-established limited liab

ility company. Volcan operates

a national supermarket chain of 23 stores, five of which are in the capital city, Urvina. All the stores are managed in

the same way with purchases being made through Volcan’s central buying department and product pricing, marketing,

advertising and human resources policies being decided centrally. The draft financial statements for the year ended

31 March 2005 show revenue of $303 million (2004 – $282 million), profit before taxation of $9·5 million (2004

– $7·3 million) and total assets of $178 million (2004 – $173 million).

The following issues arising during the final audit have been noted on a schedule of points for your attention:

(a) On 1 May 2005, Volcan announced its intention to downsize one of the stores in Urvina from a supermarket to

a ‘City Metro’ in response to a significant decline in the demand for supermarket-style. shopping in the capital.

The store will be closed throughout June, re-opening on 1 July 2005. Goodwill of $5·5 million was recognised

three years ago when this store, together with two others, was bought from a national competitor. It is Volcan’s

policy to write off goodwill over five years. (7 marks)

Required:

For each of the above issues:

(i) comment on the matters that you should consider; and

(ii) state the audit evidence that you should expect to find,

in undertaking your review of the audit working papers and financial statements of Volcan for the year ended

31 March 2005.

NOTE: The mark allocation is shown against each of the three issues.

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第7题

You are a manager in the audit department of Nidge & Co, a firm of Chartered Certified

Accountants, responsible for the audit of Darren Co, a new audit client operating in the construction industry. Darren Co’s financial year ended on 31 January 2015, and the draft financial statements recognise profit before tax of $22·5 million (2014 – $20 million) and total assets of $370 million, including cash of $3 million. The company typically works on three construction contracts at a time.

The audit is nearly complete and you are reviewing the audit working papers. The audit senior has brought several matters to your attention:

(a) Darren Co is working on a major contract relating to the construction of a bridge for Flyover Co. Work started in July 2014, and it is estimated that the contract will be completed in September 2015. The contract price is $20 million, and it is estimated that a profit of $5 million will be made on completion of the contract. The full amount of this profit has been included in the statement of profit or loss for the year ended 31 January 2015. Darren Co’s management believes that this accounting treatment is appropriate given that the contract was signed during the financial year, and no problems have arisen in the work carried out so far. (8 marks)

(b) A significant contract was completed in September 2014 for Newbuild Co. This contract related to the construction of a 20-mile highway in a remote area. In November 2014, several large cracks appeared in the road surface after a period of unusually heavy rain, and the road had to be shut for ten weeks while repair work was carried out. Newbuild Co paid for these repairs, but has taken legal action against Darren Co to recover the costs incurred of $40 million. Disclosure on this matter has been made in the notes to the financial statements. Audit evidence, including a written statement from Darren Co’s lawyers, concludes that there is a possibility, but not a probability, of Darren Co having to settle the amount claimed. (6 marks)

(c) For the first time this year, the financial statements are presented as part of an integrated report. Included in the integrated report are several key performance indicators, one of which states that Darren Co’s profit before tax has increased by 20% from the previous year. (6 marks)

Required:

Discuss the implications of the matters described above on the completion of the audit and on the auditor’s report, recommending any further actions which should be taken by the auditor.

Note: The mark allocation is shown next to each of the matters above.

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第8题

（ii) On 1 July 2006 Petrie introduced a 10-year warranty on all sales of its entire range

(ii) On 1 July 2006 Petrie introduced a 10-year warranty on all sales of its entire range of stainless steel

cookware. Sales of stainless steel cookware for the year ended 31 March 2007 totalled $18·2 million. The

notes to the financial statements disclose the following:

‘Since 1 July 2006, the company’s stainless steel cookware is guaranteed to be free from defects in

materials and workmanship under normal household use within a 10-year guarantee period. No provision

has been recognised as the amount of the obligation cannot be measured with sufficient reliability.’

(4 marks)

Your auditor’s report on the financial statements for the year ended 31 March 2006 was unmodified.

Required:

Identify and comment on the implications of these two matters for your auditor’s report on the financial

statements of Petrie Co for the year ended 31 March 2007.

NOTE: The mark allocation is shown against each of the matters above.

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第9题

6 Assume today’s date is 16 April 2005.Henry, aged 48, is the managing director of Happy H

6 Assume today’s date is 16 April 2005.

Henry, aged 48, is the managing director of Happy Home Ltd, an unquoted UK company specialising in interior

design. He is wealthy in his own right and is married to Helen, who is 45 years old. They have two children – Stephen,

who is 19, and Sally who is 17.

As part of his salary, Henry was given 3,000 shares in Happy Home Ltd with an option to acquire a further 10,000

shares. The options were granted on 15 July 2003, shortly after the company started trading, and were not part of

an approved share option scheme. The free shares were given to Henry on the same day.

The exercise price of the share options was set at the then market value of ￡1·00 per share. The options are not

capable of being exercised after 10 years from the date of grant. The company has been successful, and the current

value of the shares is now ￡14·00 per share. Another shareholder has offered to buy the shares at their market value,

so Henry exercised his share options on 14 April 2005 and will sell the shares next week, on 20 April 2005.

With the company growing in size, Henry wishes to recruit high quality staff, but the company lacks the funds to pay

them in cash. Henry believes that giving new employees the chance to buy shares in the company would help recruit

staff, as they could share in the growth in value of Happy Home Ltd. Henry has heard that there is a particular share

scheme that is suitable for small, fast growing companies. He would like to obtain further information on how such

a scheme would work.

Henry has accumulated substantial assets over the years. The family house is owned jointly with Helen, and is worth

￡650,000. Henry has a ￡250,000 mortgage on the house. In addition, Henry has liquid assets worth ￡340,000

and Helen has shares in quoted companies currently worth ￡125,000. Henry has no forms of insurance, and believes

he should make sure that his wealth and family are protected. He is keen to find out what options he should be

considering.

Required:

(a) (i) State how the gift of the 3,000 shares in Happy Home Ltd was taxed. (1 mark)

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第10题

（ii) Assuming the new structure is implemented with effect from 1 August 2006, calculate t

(ii) Assuming the new structure is implemented with effect from 1 August 2006, calculate the level of

management charge that should be made by Bold plc to Linden Limited for the year ended 31 July

2007, so as to minimise the group’s overall corporation tax (CT) liability for that year. (2 marks)

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On 1 July 2014, Sameer made a cash gift of ￡2,500 to his sister.On 1 May 2015, he made a c