TAX Real exam - Section B q1

VAT output tax

20% x standard rated supplies

input tax calculation

taxable supplies:

standard related supplies

zero rated supplies

exempt supplies (always 0)

non attributable:

part allocated to taxable supplies

exempt supplies

non attrributable part allocation formula

(taxable supplies / total supplies) x general overheads figure

non attributable exempt allocation formula

(exempt supplies / total supplies) x general overheads figure

add exempt supplies smaller figure

check if its de minimis - divide by period and if > 625, don’t include

Vat payable

output tax - input tax

Capital gains tax

determine if higher rate based on income

first work out not qualifying for relief

then work out qualifying for relief

gains not qualifying for relief format

investments in property

less annual exemption (tax table)

total

less capital losses

total

multiply by % from tax tables

qualifying for ER format

goodwill

factory

warehouse

total

shareholding

total

multiply by 10% (flat rate)

gifting shares considerations x3

1. gift is defined differently for cgt (disposal) for giver and inheritance tax for obtainer

2. iht counts if person dies up to 3 years after giving, tapered from 3 to 7 years after dying, doesnt count after 7 years

3. a chargeable gain arises regardless, and must be computed

4. there’s also allowances available on gifting, shared joinltly by both parties, but only if unquoted trading company