business tax june 2010

sue leslie

Can someone help please! In task 2.1 there is the MD's car that uses 40% private use. I allowed the 20% WDA limited to £3000 but also deducted the 40% use. In the answer it does not deduct the private use? Is there a reason for this?

Thanks in advance!

Terdoo

Re Btc

Task 2 deals with companies only

Monsoon

If it's a Ltd Co, then you do not restrict for private use (as you would in a sole trader or partnership).

In Ltd Cos, private use is taxed via the Benefit in Kind system instead. The BIK system doesn't care what % private use there is, it is totally different.

It sounds like the 40% in your question is a red herring.

sue leslie

B T June10

Thank you for that now I understand. No personal use for limited companies only for sole traders and partnerships.

I have another question sorry!!!

In the Dec 10 question 1.4 John owned another business that he sold not connected to the partnership. You are asked to calculate the net capital gain. I have done that and he is entitled to entreprenuers relief but I thought he would also get annual exemption as well but not according to the answer????

Monsoon

I believe it's in the wording.

The net gain is the gain itself.
The chargeable gain is the gain less the annual exemption (I think!)

He would get the exemption, but I think the question may be asking for one level above this, i.e. just the capital gain less ents relief.

CTB02

I got stuck on that too, back you don't have to apply is as the quesion is only asking for the NET capital gain.. So you don't have to apply the annual exemption

Well i think thats the right answer, let me know if i am wrong

Good luck for tomorrow, that is if your taking it tomorrow

sue leslie

Thanks again!! I wish they would ask straight forward what they want I have spent ages on that lol

Cheers