PTC 7 Dec 2007
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Comments
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YES BUT WHAT ABOUT 3 YEARS ANYTIME RELEIF
They only get it if they return to the property and claim it as their PPR again. They went to Australia for 6 years, but as she came back, that is deemed as occupied. Once she moved out of the house into her new flat, she never returned. Therefore although the last 36 months will be deemed occupied, the remainder (which I think was 21 months) will be chargeable.
I thought the paper was pretty easy.
Section 1 was OK, I put the reimbursed entertainment expenses in as a Benefit In Kind, along with the Company Car and the Fuel benefit, then deducted it (along with the subscription) from her salary so they cancel each other out. The property question was a little more difficult; I calculated 4 months rent as the rent due, less the maintenance BEFORE 5 April 2007, and half the insurance cost (policy taken out on October 1, to 31st March is 6 months out of 12), and I ignored the other maintenance as it would apply to the income for 07/08. I explained the reason for Antonia's father by saying it is because the tax he paid is based on the previous years Tax Liability, so he will need to make a balancing payment(the £1500), and that next years payments will be based on this year's Tax Liability, which won't take his "retirement" into account.
Section 2 surprised me as I was expecting a complicated Shares question (involving an FA1985 pool), but there wasn't. I almost forget that Bonus Issues were attached to the original shares, but remembered before I did the question. The painting was pretty straightforward, as was the ring(not chargeable) and the PPR question was a little complicated, but once I drew out the timeline and narrated it, it was OK. I can't remember the exact figure for Net Capital Gains, or the CGT liability, but for the Income Tax Liability, I believe it was nil as once the Trading Profits and Dividends were added, it came to less than £5035, so there was no assesable income. The email was OK as well, the auctioneers fee was an incidental cost of disposal, and the car is exempt, so he can't offset the loss.0 -
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Bluewednesday wrote: »I can't understand why you were told not to look at PPR. I did the first Tax exams of the new syllabus (back in June 04 I think) and we had PPR in that so it was known right from the start of tax being an exam rather than a simulation.
If it helps no two of anyone in the whole class had the same figure and nearly all of us passed!
agreed, i also took it before as a simulation and that was the case in my class too0 -
Re 21 Months.... I Got This Figure But Forgot The 3 Years Anytime Which Then Would Of Given A Nil Figure And Therefore No Gain To Pay Tax On
i think it should be 21 months. you have to have lived in it before and after to qualify for any of the 'rule'. So the 3 at anytime doesnt apply here0 -
They only get it if they return to the property and claim it as their PPR again. They went to Australia for 6 years, but as she came back, that is deemed as occupied. Once she moved out of the house into her new flat, she never returned. Therefore although the last 36 months will be deemed occupied, the remainder (which I think was 21 months) will be chargeable.
I thought the paper was pretty easy.
Section 1 was OK, I put the reimbursed entertainment expenses in as a Benefit In Kind, along with the Company Car and the Fuel benefit, then deducted it (along with the subscription) from her salary so they cancel each other out. The property question was a little more difficult; I calculated 4 months rent as the rent due, less the maintenance BEFORE 5 April 2007, and half the insurance cost (policy taken out on October 1, to 31st March is 6 months out of 12), and I ignored the other maintenance as it would apply to the income for 07/08. I explained the reason for Antonia's father by saying it is because the tax he paid is based on the previous years Tax Liability, so he will need to make a balancing payment(the £1500), and that next years payments will be based on this year's Tax Liability, which won't take his "retirement" into account.
Section 2 surprised me as I was expecting a complicated Shares question (involving an FA1985 pool), but there wasn't. I almost forget that Bonus Issues were attached to the original shares, but remembered before I did the question. The painting was pretty straightforward, as was the ring(not chargeable) and the PPR question was a little complicated, but once I drew out the timeline and narrated it, it was OK. I can't remember the exact figure for Net Capital Gains, or the CGT liability, but for the Income Tax Liability, I believe it was nil as once the Trading Profits and Dividends were added, it came to less than £5035, so there was no assesable income. The email was OK as well, the auctioneers fee was an incidental cost of disposal, and the car is exempt, so he can't offset the loss.
pretty much exactly what i had for everything there! apart from the PPR which i mucked up. i did however add the entertainment as a BIK and then take away as an allowable expense as it was reimbursed0 -
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feel quite worried reading all this. Got the shares ok. Thought the painting was exempt. Calculated the gain on the ring and mucked up ppr as didnt think it would come up. But with wrong figures got nil for income tax. And at least got the rest right with wrong figures. Hmm im worried ive failed, anyone want to take a guess?0
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oooooooo but reading that post previous you can only claim 3 years anytime if you have occupied it previously and after... so i may have done it proper... :ohmy:0
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No. Chattels are only exempt if the COST and DISPOSAL PROCEEDS are less than £6000(as was the case with the ring). The amount of the actual gain is irrelevant.
The painting was sold for 15k and was deemed to have a value of 9k when inherited so I got the gain on the painting to be 6k before taper relief, apply the 80% for the duration if ownership gives the 4.8k that was taxable.
Then in the final kicker of an e-mail you where told about the 10% Acutioneers fees so the gain is reduced to 3.6k after taper...0 -
feel quite worried reading all this. Got the shares ok. Thought the painting was exempt. Calculated the gain on the ring and mucked up ppr as didnt think it would come up. But with wrong figures got nil for income tax. And at least got the rest right with wrong figures. Hmm im worried ive failed, anyone want to take a guess?
You got nil for income tax in which section?0 -
They only get it if they return to the property and claim it as their PPR again. They went to Australia for 6 years, but as she came back, that is deemed as occupied. Once she moved out of the house into her new flat, she never returned. Therefore although the last 36 months will be deemed occupied, the remainder (which I think was 21 months) will be chargeable.
I thought the paper was pretty easy.
Section 1 was OK, I put the reimbursed entertainment expenses in as a Benefit In Kind, along with the Company Car and the Fuel benefit, then deducted it (along with the subscription) from her salary so they cancel each other out. The property question was a little more difficult; I calculated 4 months rent as the rent due, less the maintenance BEFORE 5 April 2007, and half the insurance cost (policy taken out on October 1, to 31st March is 6 months out of 12), and I ignored the other maintenance as it would apply to the income for 07/08. I explained the reason for Antonia's father by saying it is because the tax he paid is based on the previous years Tax Liability, so he will need to make a balancing payment(the £1500), and that next years payments will be based on this year's Tax Liability, which won't take his "retirement" into account.
Section 2 surprised me as I was expecting a complicated Shares question (involving an FA1985 pool), but there wasn't. I almost forget that Bonus Issues were attached to the original shares, but remembered before I did the question. The painting was pretty straightforward, as was the ring(not chargeable) and the PPR question was a little complicated, but once I drew out the timeline and narrated it, it was OK. I can't remember the exact figure for Net Capital Gains, or the CGT liability, but for the Income Tax Liability, I believe it was nil as once the Trading Profits and Dividends were added, it came to less than £5035, so there was no assesable income. The email was OK as well, the auctioneers fee was an incidental cost of disposal, and the car is exempt, so he can't offset the loss.
Surely the reimbursed entertainment expenses arn't a benefit in kind? as they were purely employment related. Otherwise that's basically what i did, the shares question was surprisingly simple, PPR i ended up with i think 21/236, Income tax liability nil as trading profits & dividends were totally covered by personal allowance. I totally forgot cars were exempt though which i'm pretty annoyed about cos I knew it last night :blushing:, instead i waffled on about the losses relating to the followin tax year as it was sold on 14 Apr '07.0 -
For Task 1.1 BIK I stated that the expenses and subscription were exempt as the expenses were paid for expenses incurred, the subscription was paid personally. So the only BIK was the car and fuel (I said no allowance for the money contributed as it was for fuel)
For 1.2 the rent eventually (once I learned how to count months on my fingers) was 4 months @ 8k per annum so 2,667. As to the expenses I allowed the full value of maintenance prior to April 2005, 1/2 the insurance and nothing for the decorating.
For 1.3 I almost forgot to include the subscription as a negative in the non savings column. But I am not sure what numbers I got for the column totals. I think the total was somthing like 39,290.
1.4 Sorry the numbers are a complete blank.
For 1.5 - the 1.4k needed for 2006/7 was a balance to pay and the 3.5k was a payment on account for 2007/8. I said HRMC were not aware of the change in circumstances.
For 1.6 tell nothing...
For 2.1 Thank Heaven there was no 1985 Pool to calculate (in all my revision questions I had forgotten to perform and indexation, either in the middle to the last one to Apr 98) so I just attached the Bonus and Rights Issues to the original date.
2.2 The painting - said the gain was 6k
2.3 Ring - exempt
2.4 The House - well I got 21/236 so the number was in the region of 10660 (I Hope)
2.5 - Sorry can't remember the taxable amount but I got it to about 9.5k
2.6 - Income Tax - the total of trading profits and dividend income was less than the personal allowance. For CGT I got about 1250 payable...
2.7 The car (exempt), the time to correct your errors, and the nice bit that almost wiped out the tax bill...0 -
For Task 1.1 BIK I stated that the expenses and subscription were exempt as the expenses were paid for expenses incurred, the subscription was paid personally. So the only BIK was the car and fuel (I said no allowance for the money contributed as it was for fuel)
For 1.2 the rent eventually (once I learned how to count months on my fingers) was 4 months @ 8k per annum so 2,667. As to the expenses I allowed the full value of maintenance prior to April 2005, 1/2 the insurance and nothing for the decorating.
For 1.3 I almost forgot to include the subscription as a negative in the non savings column. But I am not sure what numbers I got for the column totals. I think the total was somthing like 39,290.
1.4 Sorry the numbers are a complete blank.
For 1.5 - the 1.4k needed for 2006/7 was a balance to pay and the 3.5k was a payment on account for 2007/8. I said HRMC were not aware of the change in circumstances.
For 1.6 tell nothing...
For 2.1 Thank Heaven there was no 1985 Pool to calculate (in all my revision questions I had forgotten to perform and indexation, either in the middle to the last one to Apr 98) so I just attached the Bonus and Rights Issues to the original date.
2.2 The painting - said the gain was 6k
2.3 Ring - exempt
2.4 The House - well I got 21/236 so the number was in the region of 10660 (I Hope)
2.5 - Sorry can't remember the taxable amount but I got it to about 9.5k
2.6 - Income Tax - the total of trading profits and dividend income was less than the personal allowance. For CGT I got about 1250 payable...
2.7 The car (exempt), the time to correct your errors, and the nice bit that almost wiped out the tax bill...
I agree with most of this down to 2.5 - i had a net taxable before AE of 17600 which left CGT of around £1550. Wait and see a guess - roll on February!
Merry Xmas Everybody!0 -
Kimberleena wrote: »You got nil for income tax in which section?
oh just in the 2nd section, if it was the 1st then i'd be certain of failure, haha0 -
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For Task 1.1 BIK I stated that the expenses and subscription were exempt as the expenses were paid for expenses incurred, the subscription was paid personally. So the only BIK was the car and fuel (I said no allowance for the money contributed as it was for fuel)
For 1.2 the rent eventually (once I learned how to count months on my fingers) was 4 months @ 8k per annum so 2,667. As to the expenses I allowed the full value of maintenance prior to April 2005, 1/2 the insurance and nothing for the decorating.
For 1.3 I almost forgot to include the subscription as a negative in the non savings column. But I am not sure what numbers I got for the column totals. I think the total was somthing like 39,290.
1.4 Sorry the numbers are a complete blank.
For 1.5 - the 1.4k needed for 2006/7 was a balance to pay and the 3.5k was a payment on account for 2007/8. I said HRMC were not aware of the change in circumstances.
For 1.6 tell nothing...
For 2.1 Thank Heaven there was no 1985 Pool to calculate (in all my revision questions I had forgotten to perform and indexation, either in the middle to the last one to Apr 98) so I just attached the Bonus and Rights Issues to the original date.
2.2 The painting - said the gain was 6k
2.3 Ring - exempt
2.4 The House - well I got 21/236 so the number was in the region of 10660 (I Hope)
2.5 - Sorry can't remember the taxable amount but I got it to about 9.5k
2.6 - Income Tax - the total of trading profits and dividend income was less than the personal allowance. For CGT I got about 1250 payable...
2.7 The car (exempt), the time to correct your errors, and the nice bit that almost wiped out the tax bill...
answers upto ring r similar....but y ring is exemp..????i didnt understand....
it was profit so i thought it will be taxable.......
n wat did answer did u get in PPR house one.......????0 -
Bashanti,
The ring was exempt as both the cost and selling price where less that 6k so it doesn't matter that the sale made a profit.
I got the house to be 21/236 months chargable under CGT. The question said the person bought the house and lived in it, then moved to Oz, returned and lived in it, moved out, then sold it without ever moving back in. So the reliefs available are actual occupation, time whislt working abroard and the final 3 years of ownership. I got the period from moving out to sale as 57 months (36 of wihch are 100% releif). I took the sale proceeds, deducted the costs, applied the indexation allowance. This gives the gross gain before PPR relief, multipled this by 215/236. As mentioned came out with aprrox 10660, think it was actually 10661 before taper, as the house was owned before April 98 the taper was 60%.0 -
Agree with everything apart from the taper. The house was owned for 8 complete years after April 1998 (to April '06), plus a bonus year(owned before 17/3/98), therefore 65% is chargeable (35% relief).0
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Kimberleena wrote: »hmmmm i got nil on my income tax bit as well
Well that was right. I'm just so feeling sick with the mistakes I made. I was thinking about this 5/3 rule and somehow thought that if an items was bought and sold under 6 grand, you still dealt with it. Just thought didn't use the 5/3 rule. Ah well. So got a big lump of figures wrong with the 4 items only getting the shares correct (what i concentrated on like a crazy man in revision!!!) which proved to be a mistake! Got the rest right with the wrong figures if you see what i mean
Anybody got any experience of doing something like this but still passing? i'm hoping but ahh unfortunately wouldn't be surprised if i failed0 -
Car Benefit, pension, and retricted capital gain
I used the bloody car purchase price instread of list price, then I wasn't sure how to deal with the pension contibutions and finaly I restricted my capital gains on chattels to 3/5 instead of 5/3.
This is the second time I've sat this paper was really confident I passed the first time when I sat it along with BTC of which I was not confident at all, I made a mess of section 2 and passed BTC (how Ironic). I fear this time I'll probably pass section 2 and fail section 1! GGGGRRRRR!!!! But fingers crossed if I done everything else right these could be looked as silly mistakes.0 -
I'm sure taper relief was only 65% as it was not 9 full years but 8.5 + the bonus year0
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Ptc
Hello did anyone else do the 5/3 calculation for any of the assets in section 2?0 -
;-(
I think even though alot of people have got different answers i hope the markers notice where everyone is falling up on and allow a few hick-ups here and there, a friend of mine done another exam and thought he`d failed but told me he knew he got the wrong answers but the workings where correct and they passed him, i hope i pass ;-( (friend done another PTC exam paper a few years back)0 -
Hi All
I've been reading through this thread and I keep thinking that I've really screwed up my PTC paper on the PPR. It wasn't something I was 100% on in the first place so, now I'm going back over the paper as it's available on the site.
I studied with BPP and the course notes state:
*The last 36 months are always deemed occupation in full provided it was the taxpayers PPR at some point.
*Certain periods of absence are deemed occupation, providing that they are preceded and followed (at anytime whatsoever) by actual occupation:
-Any period during which the owner was abroad by reason of his employment.
-Any periods (not exceeding 4 years in total) during which the employed owner was required to work away from home in the UK.
-Any periods (not exceeding 4 years in total) during which the owner if self-employed was working away from home in the UK or overseas.
-Any periods for whatever reason not exceeding 3 years in total.
From what I can gather from previous replies to this thread, most people got to a total of 21 months, being the period between 1/2/02 & 31/10/06 (57 months) less the 3 years (36months) anytime allowance = 21
But I have this nagging in my brain that the period that he was in Australia was not exempt at all and the answer should have been 72 months (6yrs in Oz) + 21 months = 93 months.
The reason is that it did not state that he was required to work in Oz by his employer..... it said he went to take up employment.
Even writing this now, I'm not sure. I think the question wasn't defined enough.......... all I know is I didn't put 21 or 93 !!! I just wish I had studied it more......
Any thoughts ????0 -
Hi
I have to disagree with this 21 months on the ppr.
He moved to Aus and then returned to his house to live. So as I see it you have 36 months exempt, 36 months chargeable in that period.
So it should be 57 months chargeable in total.0 -
Hi Finlaysdad
I am inclined to agree with you, I applied similar logic but instead of 36 months chargeable in the period he was in Oz, for some reason my memory told me to allow him 4 years out of the six so I actually calculated it as 21 months chargeable for the end period and 24 (72-48) for the Oz period giving a total of 45...... I am hoping they will see it as one error and allow me some slack !!!!0 -
I also agree with the 57 months :thumbup:0
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It's definitely 21 months. The exam paper states:On 1 March 1987, Zhu bought a house for £36,000. He had lived in it until 1 September 1990, when he went to Australia to take up employment. He returned from there on 1 September 1996 and moved back into the house until 1 February 2002 when he purchased a small flat. He has lived in the flat since then. Zhu finally sold the house for £178,000 on 31 October 2006.
1/3/87-31/10/06 = 19 years and 8 months = 236 months.
1/3/87-31/8/90= 3 years and 6 months(42 months) Lived in house, therefore exempt.
1/9/90-31/8/96 = 6 years(72 months). Went to Australia for employment, which is exempt period of absence due to employment outside the United Kingdom, Section 223(3)(b) Link
1/9/96-31/1/02 = 5 years and 5 months (65 months). Lived in house, therefore exempt.
1/2/02-31/10/06 = 4 years and 9 months (57 months). Left house(moved to small flat). Last 36 months (1/11/03-31/10/06) are exempt under section 223(2)(a). Link. Balance of 21 months (57 - 36) is chargeable.0 -
Ah well. That will teach me to be over confident!0
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Solve the PPR Question !!!!
Dear All
I am sorry to destroy your hopes, but I have just received confirmation from my tutor that it should have been 21months chargeable............... the six years was totally exempt !!!!!
I feel I will be re-taking this one in June !!!!!:cursing::cursing:0
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