1. For the tax year 2014–15, Nog has a chargeable gain of £23,700 and a capital loss of £10,400. She has unused capital losses of £6,100 brought forward from the tax year 2013–14.
    What amount of capital losses can Nog carry forward to the tax year 2015–16?
    A £3,800
    B Nil
    C £6,100
    D £2,300
  1. Quinn will not make the balancing payment in respect of her tax liability for the tax year 2013–14 until 17 October 2015.
    What is the total percentage of penalty which Quinn will be charged by HM Revenue and Customs (HMRC) in respect of the late balancing payment for the tax year 2013–14?
    A 15%
    B 10%
    C 5%
    D 30%
  1. Which classes of national insurance contribution is an employer responsible for paying?
    A Both class 2 and class 4
    B Class 1 only
    C Both class 1 and class 1A
    D Class 2 only
  1. Alice is in business as a sole trader. On 13 May 2014, she sold a freehold warehouse for £184,000, and this resulted in a chargeable gain of £38,600. Alice purchased a replacement freehold warehouse on 20 May 2014 for £143,000. Where possible, Alice always makes a claim to roll over gains against the cost of replacement assets. Both buildings have been, or will be, used for business purposes by Alice.
    What is the base cost of the replacement warehouse for capital gains tax purposes?
    A £181,600
    B £104,400
    C £143,000
    D £102,000
  1. For the tax year 2014–15, Chi has a salary of £53,000. She received child benefit of £1,771 during this tax year.
    What is Chi’s child benefit income tax charge for the tax year 2014–15?
    A £1,771
    B Nil
    C £1,240
    D £531
  1. Naomi is self-employed. For the year ended 5 April 2015 she made a trading loss of £110,000, having made a trading profit of £24,000 for the year ended 5 April 2014. Naomi also had employment income of £92,000 for the tax year 2013–14.
    What is the maximum loss relief claim which Naomi can make against her total income for the tax year 2013–14?
    A £74,000
    B £50,000
    C £110,000
    D £29,000
  1. 7. On 26 November 2014 Alice sold an antique table for £8,700. The antique table had been purchased on 16 May 2011 for £3,800.
    What is Alice’s chargeable gain in respect of the disposal of the antique table?
    A £4,500
    B £1,620
    C £4,900
    D Nil
  1. Which of the following assets will ALWAYS be exempt from capital gains tax?
    (1) A motor car suitable for private use
    (2) A chattel
    (3) A UK Government security (gilt)
    (4) A house

A 1 and 3
B 2 and 3
C 2 and 4
D 1 and 4

  1. Linda sold an asset in November 2014. Her chargeable gain on the sale was £25,000. Linda has taxable income of £20,000 in the tax year 2014/15. The asset does not qualify for entrepreneur’s relief. What is Linda’s capital gain tax liability for the year 2014/15 assuming that she has no other disposals in the year?
    A £2,734
    B £3,920
    C £5,814
    D £2,520
  1.  Tobi purchased a ten-acre plot of land in May 2008 for £80,000. In January 2015, Tobi sold three of the acres for £36,000 with expenses of sale amounting to £1,000. The market value of the remaining seven acres of land in January 2015 was £90,000.
    What’s Tobi’s chargeable gain on the disposal of the three acres of land in the tax year 2014/15?
    A £12,600
    B £13,143
    C £11,000
    D £12,143
  1. John and Rhonda Beach are married couple. The following information is available for the tax year 2014–15:

John Beach

(1) John was born in 1956 and is employed by Surf plc as a sales director. During the tax year 2014–15, he was paid gross director’s remuneration of £184,000.

(2) During the tax year 2014–15, John contributed £28,000 into Surf plc’s HM Revenue and Customs’ registered occupational pension scheme. The company contributed a further £12,000 on his behalf. Both John and Surf plc have made exactly the same contributions for the previous five tax years.

(3) During the period 6 April to 31 October 2014, John used his private motor car for both private and business journeys. He was reimbursed by Surf plc at the rate of 60p per mile for the following mileage:

Miles

Normal daily travel between home and Surf plc’s offices                                   1,180
Travel between Surf plc’s offices and the premises of Surf plc’s clients           4,270
Travel between home and the premises of Surf plc’s clients (none of the
clients’ premises were located near the offices of Surf plc)                                 510

––––––

Total mileage reimbursed by Surf plc                                                                          5,960

––––––

(4) During the period from 1 November 2014 to 5 April 2014, Surf plc provided John with a petrol powered motor car which has a list price of £28,200 and an official CO2 emission rate of 201 grams per kilometre. Surf plc also provided John with fuel for both his business and private journeys.

(5) During 2011 Surf plc provided John with a loan which was used to purchase a yacht. The amount of loan outstanding at 6 April 2014 was £84,000. John repaid £12,000 of the loan on 31 July 2014, and then repaid a further £12,000 on 31 December 2014. He paid loan interest of £1,270 to Surf plc during the tax year 2014–15. The taxable benefit in respect of this loan is calculated using the average method.

(6) John owns a holiday cottage which is let out as a furnished holiday letting, although the letting does not qualify as a trade under the furnished holiday letting rules. The property business profit for the year ended 5 April 2015 was £6,730.

Rhonda Beach

(1) Rhonda was born in 1947 and during the tax year 2014–15 she received pension income of £8,040.

(2) In addition to her pension income, Rhonda received gross building society interest of £21,400 during the tax year 2014–15.

 

Required:

(a) Calculate John Beach’s income tax liability for the tax year 2014–15.      (14 marks)

(b) Calculate the class 1 and class 1A national insurance contributions that will have been suffered by John Beach and Surf plc in respect of John’s earnings and benefits for the tax year 2014–15.                                                                                                                                                      (4 marks)

(c) Calculate Rhonda Beach’s income tax liability for the tax year 2014–15. (4 marks)

(d) State the tax advantages of a rental property qualifying as a trade under the furnished holiday letting rules.

2 You should assume that today’s date is 1 March 2015.

(a) On 27 August 2014, Ruby disposed of an investment property, and this resulted in a chargeable gain of £45,800. For the tax year 2014–15, Ruby has taxable income of £17,600.

Required:

Calculate Ruby’s capital gains tax liability for the tax year 2014–15 if this is her only disposal in that tax year. (2 marks)

(b) In addition to the disposal already made on 27 August 2014, Ruby is going to make one further disposal during the tax year 2014–15. This disposal will be of either Ruby’s holding of £1 ordinary shares in Pola Ltd, or her holding of 50p ordinary shares in Aplo plc.

Shareholding in Pola Ltd

Pola Ltd is an unquoted trading company, in which Ruby has a 10% shareholding. The shareholding was purchased on 14 July 2007 for £23,700 and could be sold for £61,000. Ruby has been an employee of Pola Ltd since 2005.

Shareholding in Aplo plc

Aplo plc is a quoted trading company, in which Ruby has a shareholding of 40,000 50p ordinary shares. Ruby received the shareholding as a gift from her father on 27 May 2010. On that date, the shares were quoted on the stock exchange at £2·12–£2·24. There were no recorded bargains on that date. The shareholding could be sold for £59,000.

Neither entrepreneurs’ relief nor holdover relief is available in respect of this disposal.

Required:

Calculate Ruby’s revised capital gains tax liability for the tax year 2014–15 if, during March 2015, she also disposes of either (1) her shareholding in Pola Ltd; or alternatively (2) her shareholding in Aplo plc.

Note: The following mark allocation is provided as guidance for this requirement:

Pola Ltd (4.5 marks)

Aplo plc (3.5 marks)

(8 marks)

(10 marks)