Reference no: EM132359415

Tasks 1:

A. Robin started sole trader business on 20 February 2015. The profit and loss account of his sole trader business for the year ended 31 March 2019 is as follows:

Sales Less: Cost of Sales Gross Profit Add: other Income		500,000 (200.000)
		300,000
Rental income	4,000
Interest on Debenture Received	4,800
Interest from National Savings certificate	1,200
Dividend	6,000	16,000
Less: Expenses:		316,000
Depreciation	16,000
Wages and Salaries	24,000
Interest Expense	4000
Subscription	1,600
Donation	4,000
Bad and doubtful debt	1,000
Gift and Entertainment	5,500
Other Expense	2,800
Repairs and maintenance	10,000
Car Expenses	12,400
Car Lease Rent	10,000	-91,400
NET PROFIT		224,600

1. Wages and salaries includes £8,000 salary paid to Reema, wife of Robin. Reema worked for part-time for the business of Robin, but for the similar work done by other employees get salary of 5,000.

2. Subscription of £1600 includes £600 for Car Dealers Association and £1000 for the club membership fees of Robin which is his personal.

3 Donation includes £200 for local Charity, £3,200 for National Charity, £600 is for Political party

4. Bad and doubtful debt is for the trade debt. it is fully allowable

5. Gift and Entertainment includes:
Gift of Calendar costing £2 each for 200 customers = £400
Gift of food hampers to staff £5 X 200 staff = £1,000
Gift of cigarette packets for customers £8 X 100 customers = E1,600
Gift of watch costing £55 each for 5 customers = £550
Staff party expense is £800
Customers' party is £1,050
Birthday party of Robin's daughter £200

6 Other expenses includes £1,200 speeding fine for Robin, £600 for penalty for not following the safety regulations and £300 is a gift to a staff upon his marriage The remaining balance is for business purposes.

7 Repairs and maintenance includes £6,000 for the business building extension and £1,000 for the decoration of the building. Firm purchased a new printer for £2,400 for business purposes, which is also included along with the Repair cost. Balance amount is revenue expenditure for business purposes.

8. Car Expenses:
Firm had 3 cars:
Car 1 is used by Robin fully business use The expense for this car is £5,000
Car 2 is used by Robin 20% for personal purposes The expense for this car is £6,000.

Car 3 is used by the Robin, fully for personal purposes. The expense for this car is £1,400

9 Robin has taken one car on rental basis for the annual rent of £10,000. The CO₂ emission of the car was 120 gins per km

10 Capital allowance:

Robin had 3 cars in the business. The written down value (opening balance) of three cars are as follows:

	Car 1	Car 2	Cat 3
Opening Balance	£30,000	£20,000	£25,000
	100% for business use	80% Business use	100% private use

Capital Allowance is 18% per annum

11. The business had incurred Loss for the year ended 31 December 2016 was £160,000 and the profit for the year ended 31 March 2017 was £150,000.

12. Robin is also a partner In a partnership firm along with Rony and Seema from last 5 years sharing profit and losses in the ratio of 3:2:1 after giving salary of £20,000, £16,000 and £8,000 and Interest on Capital of £6,000. £4,000 and £2,000. The adjusted profit for the year ended 31 March 2018 is £128,000

Required:

a) Calculate the adjusted trading Profit for the year ended 31 March 2018

b) Explain how Robin can claim loss relief for the loss incurred during the year end 31 March 2018. Show the Trading profit after claiming loss relief

c) Allocate the profit of the partnership to Robin, Rony and Seema for the year ended 31 March 2018.

d) Calculate the taxable income of Robin, Tax liability and Tax Payable of Robin for the tax year 2018/19.show the due date for payment of tax.

e) Explain the various rules of tax administration for individual for the tax year 2018/19

Task 2:
a) 'Capital Gains tax (CGT) Is charges on gains arising on Chargeable disposals of chargeable assets by Chargeable persons'.

Explain the above statement with su table examples, including exempt disposals, exempt assets and exempt persons. Also, explain clearly the tax incidence in the hands of UK resident and Non-UK resident

Task 3:
b) Roy sold the following assets during the tax year 2018/19. The details of cost and sale price is as follows
(I) in 2014, Roy inherited a small business from his father. Roy continued the same business. The business had a workshop. As the business grown, the space available en the workshop is not enough and Roy decided to purchase new large workshop in the outskirt of the city Therefore, On 16/2/2019 he sold the present small workshop for £200,000. The cost of the old workshop is taken as £80,000. He reinvested the sale proceeds in new workshop, which cost him £190,000 on 10 March 2019, which is used fully for business purposes.
(ii) Roy gifted 10,000 shares in Comp plc. an quoted company. On the date of gift, the market value of the shares of Comp plc was £50,000. The cost of the shares was £12,000.
(iii) On 1 August 2018, Roy sold his Cottage to his sister for £100,000. On the date of sale, the market value of the cottage was £220,000 He paid £1,000 brokerage for selling the cottage. He purchased the Cottage on 15 September 2011 for £80,000 and had paid legal fees at the time of purchasing the cottage of (2,000 On 10 November 2012, he incurred capital expenditure of £40,000.
(iv) He Sold a painting for (4,000 on 1 July 2018 This was purchased at an auction on 3 April 2010 for £8,500
(v) Roy had brought forward loss of £5,000

Required:
a) Calculate the capital gains arising from the above disposals after claiming the available relief wherever applicable.
b) calculate the capital gain tax for the tax year 2018/19, if his taxable income in 2018/19 is £25,000 and he gave donation of 8,000 to Charity
c) Explain the conditions to claim Rollover relief for the gain arising on the sale of workshop by Roy
d) What the conditions to Claim gift relief, which assets are eligible. You answer should connect to the given question