ACCA

Paper P6
Advanced Taxation
Revision Mock Examination
June 2015
Question Paper
Time Allowed

15 minutes

Reading and planning

3 hours

Writing

This paper is divided into two sections:

Section A BOTH questions are compulsory and MUST be
attempted
Section B TWO questions ONLY to be attempted
Tax rates and allowances are on pages 36.
Do NOT open this paper until instructed by the supervisor.
During reading and planning time only the question paper
may be annotated. You must NOT write in your answer
booklet until instructed by the supervisor.

 Interactive World Wide Ltd, March 2015

All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, without the prior written
permission of Interactive World Wide Ltd.

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Tax rates and allowances given in P6 to be used for the

June 2015 and December 2015 exams
SUPPLEMENTARY INSTRUCTIONS
1.

You should assume that the tax rates and allowances for the tax year
2014/15 and for the financial year to 31 March 2015 will continue to
apply for the foreseeable future unless you are instructed otherwise.

2.

Calculations and workings need only be made to the nearest .

3.

All apportionments should be made to the nearest month.

4.

All workings should be shown.

Income tax
2014/15
Basic rate
Higher rate
Additional rate

1 to 31,865
31,866 to 150,000
150,001 and above

Normal rates
%
20
40
45

Dividend rates
%
10
32.5
37.5

A starting rate of 10% applies to savings income where it falls within the first
2,880 of taxable income.

Personal allowances
Born on or after 6 April 1948
Born between 6 April 1938 and 5 April 1948
Born before 6 April 1938
Income limit
Personal allowance
Personal allowance (born before 6 April 1948)

10,000
10,500
10,660
100,000
27,000

Car benefit percentages

The base level of CO2 emissions is 95 grams per kilometre.
The percentage rates applying to petrol cars with CO2 emissions up to this level
are:
75 grams per kilometre or less
7694 grams per kilometre
95 grams per kilometre

%
5
11
12

Car fuel benefit

The base level figure for calculating the car fuel benefit is 21,700.

Authorised mileage allowance payments (AMAP)

First 10,000 business miles
Any miles in excess of 10,000

45p per mile

25p per mile

Pension scheme limits

Annual allowance 2014/15
Annual allowance to 2013/14
Lifetime allowance

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40,000
50,000
1,250,000

The maximum contribution that can qualify for tax relief without any earnings is
3,600.

New individual savings accounts (NISAs)

New individual savings accounts the investment limit

15,000

Child benefit income tax charge

Where income is between 50,000 and 60,000, the charge is 1% of the amount of
child benefit received for every 100 of income over 50,000.

Residence: number of ties needed to be UK resident

Days in UK
Less than 16 days
16 to 45
46 to 90
91 to 120
121 to 182
183 days

Previously UK resident
Automatically not UK
resident
Resident if 4 UK ties
Resident if 3 UK ties
Resident if 2 UK ties
Resident if 1 UK tie
Automatically UK resident

Not previously UK resident

Automatically not UK resident
Automatically not UK resident
Resident if 4 UK ties
Resident if 3 UK ties
Resident if 2 UK ties
Automatically UK resident

Capital allowances
Plant and machinery
Main pool
Special rate pool

18%
8%

Motor cars
CO2 emissions up to 95 grams per kilometre
CO2 emissions between 96 and 130 grams per kilometre
CO2 emissions over 130 grams per kilometre

100%
18%
8%

Annual investment allowance

First 500,000 of expenditure

100%

Enhanced capital allowances (ECA)

100%

Corporation tax
Financial year
Small profits rate
Main rate
Lower limit ()
Upper limit ()
Standard fraction

2011
20%
26%
300,000
1,500,000
3/200

2012
20%
24%
300,000
1,500,000
1/100

2013
20%
23%
300,000
1,500,000
3/400

2014
20%
21%
300,000
1,500,000
1/400

Marginal relief
(U A) N/A Standard fraction
Patent box deduction
Net patent profit x 70% x [(MR-10%)]/MR
Where MR is the main rate of corporation tax

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Value added tax

Registration limit
Deregistration limit
Standard rate

81,000
79,000
20%

Inheritance tax: nil rate bands and tax rates

Rate of tax on excess over nil rate band
- Lifetime rate

20%

- Death rate

40%

6 April 2014 to 5 April 2015

325,000

6 April 2013 to 5 April 2014

325,000

6 April 2012 to 5 April 2013

325,000

6 April 2011 to 5 April 2012

325,000

6 April 2010 to 5 April 2011

325,000

6 April 2009 to 5 April 2010

325,000

6 April 2008 to 5 April 2009

312,000

6 April 2007 to 5 April 2008

300,000

6 April 2006 to 5 April 2007

285,000

6 April 2005 to 5 April 2006

275,000

6 April 2004 to 5 April 2005

263,000

6 April 2003 to 5 April 2004

255,000

6 April 2002 to 5 April 2003

250,000

6 April 2001 to 5 April 2002

242,000

6 April 2000 to 5 April 2001

234,000

Taper relief

% Reduction

Years before death

Over 3 years up to 4 years

20

Over 4 years up to 5 years

40

Over 5 years up to 6 years

60

Over 6 years up to 7 years

80

Over 7 years

100

Rates of interest
Official rate of interest
Rate of late payment interest
Rate of repayment interest

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3.25%
3%
0.5%

Stamp duty land tax

150,000 or less (1)

Nil

150,001 - 250,000

1%

250,001 - 500,000

3%

500,001 - 1,000,000

4%

1,000,001 - 2,000,000 or more (2)

5%

2,000,001+ (2)

7%

(1)

For residential property, the nil rate is restricted to 125,000.

(2)

The 5% and 7% rates only apply to residential properties only.

Stamp Duty
Shares

0.5%

Capital gains tax

11,000
5,500

Annual exempt amount for individuals

Annual exempt amount for a trustee
Rate of tax
Lower rate
Higher rate

18%
28%

Entrepreneurs relief
Lifetime limit

10,000,000

Rate of tax

10%

National Insurance (not contracted out rates)

Class 1 Employee
1 to 7,956 per year
7,957 to 41,865 per year
41,866 and above per year

Nil
12%
2%

Class 1 Employer
1 to 7,956 per year
7,957 and above per year
Employment allowance

Nil
13.8%
2,000

Class 1A

13.8%

Class 2
Small earnings exemption

2.75 per week

5,885

Class 4
1 to 7,956 per year
7,957 to 41,865 per year
41,866 and above per year

Nil
9%
2%

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Section A BOTH questions are compulsory and MUST be

attempted
1

An extract from an e-mail from your manager detailing the tasks for you to
perform are set out below.
I have forwarded an e-mail to you from Chippy Minton, a new client who is
married to Dora. Currently Chippy is employed as a full-time manager in an
advertising agency, but will be given 3 months notice on 1 July 2015. Using
his redundancy he plans to start a new business manufacturing furniture.
Please write a letter to Chippy addressing the following matters.
(i)

Redundancy from the advertising agency

The redundancy package is set out in Chippy's email below.

(ii)

Calculate the amount of finance available to invest in the new

business, this will be the additional after tax income based on
the figures provided by Chippy in his email.

Also in your letter you should include an explanation of why the

amounts he received are taxable or not.

Chippy and Dora each have annual rental income of 10,000.

Hobbies include collecting antique furniture

Between August 2014 and June 2015 he bought and renovated six
items of furniture for use in his home. One of the six items was a
large dining table which was purchased in October 2014 for 12,000.
This acquisition was financed with a six month bank loan on which he
paid interest of 600. Renovating the table cost 2,000 and was
completed in February 2015. The table was then used at home until
he decided it was too large. On 2 May 2015 he sold the table at
auction for 21,000 less auctioneers' fees of 1,000. Using the funds
from selling the table, Chippy is keen to buy a smaller table in the
next auction in July 2015 which he plans to renovate and keep. If this
one also proves unsuitable, he will also sell this one at auction.
Please include a detailed explanation of your tax treatment of the
table sold in May based on our knowledge of Chippy's circumstances.
I understand that he has not previously sold any furniture prior to
this.

(iii)

New business venture

As a result of being made redundant, Chippy is now considering
setting up a sole trader business manufacturing bespoke furniture
from 1 April 2016. Chippy estimates that in the first year his sales
revenue will be about 72,000 and this will result in a small profit of
about 2,000, at this stage he plans to run the business himself. He
hopes that profits will rise steadily and, in the second year, he
estimates that his sales revenue will be 121,200 and his tax adjusted
profits will amount to 60,000. He is also keen to involve his wife
Dora in the business hopefully from the start of the second year.
The figures I have quoted above do not take into account the
implications of Dora working in the business.

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(iv)

For Chippy's planned business for the second year, please

prepare estimates of the effect on the couples total tax under
each of the following alternatives compared to the situation
where he runs the business himself as a sole trader.
(1)

Chippy employs Dora on a gross salary of 20,000.

(2)

Chippy runs the business in partnership with Dora, each

being assessed on 50% of the profit.

As you will see from Chippy's email, he seems unsure about the
VAT implications of setting up this new business so in your letter
you should also include a clear explanation of when it will be
necessary for him to register for VAT and the implications of
doing this.

Expansion of the business

Chippy has also set out in his e-mail details regarding the planned
expansion of the business in the future.
Your letter should also include:
-

Any possible tax advantages available to Chippys brother which

would encourage him to invest in a new start -up company.

Also please address the comment in Chippy's e-mail in which he

says his aim is to minimise his tax liability by whatever means
are necessary, this comment particularly concerns me, and may
affect our willingness to act as his tax adviser. Please include
any details from the ACCA Professional Code of Ethics that you
think appropriate.

E-mail from Chippy

Redundancy from the advertising agency
I will be leaving my job on 30 September 2015, I will receive my final
month's salary together with a number of other payments. I am not sure
how much will be left to invest in the new business after paying all the tax.
Three months' salary in lieu of the remaining notice period
Statutory redundancy
A payment to prevent me starting up in competition
An ex-gratia redundancy payment

16,500
5,000
10,000
50,000

I also had a company car with list price of 29,200 (including VAT) and CO2
emission of 119 grams per kilometre. I paid 5,400 towards the capital
cost for the car when I first received it and I paid 20 per month as a
condition of being able to use the car for private purposes. No private fuel
was provided by my employer.

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New business venture

I am not sure whether initially I should employ my wife in the business or
form a partnership and then we would be equal partners. I would prefer
the option which maximises the family's after tax income.
One other area that I am confused about is VAT. I am not sure if it will be
necessary for me to register for VAT and, if so, when and what do I put on
the first VAT return once I am VAT registered.
Expansion of the business
Once I have my furniture business up and running, I am hoping to diversify
the business by supplying some budget furniture which hopefully will
increase the annual profits of the business to 120,000 per annum. If this
happens, we will run the business as a company.
If we go for the company route it may be possible to get finance by issuing
shares to other members of my family. My brother who last year won the
lottery and is currently on a world cruise, is keen to be involved with the
new business and has asked me to find out if he can get any tax benefits if
he invests some of his lottery winnings in a new start -up company.
We are very keen to minimise the total tax payable by whatever means are
necessary.
Required:
Prepare the letter requested in the email from your manager.
following marks are available:

The

(i)

The redundancy package which Chippy will receive.

(6 marks)

(ii)

The tax treatment on the sale of the table.

(6 marks)

(iii) New business venture.

(iv) Expansion of the business.

(14 marks)
(7 marks)

Professional marks will be awarded for the appropriateness of the

format and presentation of the memorandum and the effectiveness
with which the information is communicated.
(2 marks)
(35 marks)

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Extracts from e-mails from your manager and a client, Winston.

E-mail from your manager
I have sent an e-mail to you from Winston, the managing director of
Horizon Ltd, a company which is resident in the UK.
Please write some notes addressing the matters raised by Winston whilst
taking into account the following instructions and additional information.
(i)

The corporation tax liability for the year ending 31 March 2015
-

Horizon Ltd's taxable trading profit for the year was 332,000.

On 15 June 2014, Horizon Ltd sold a freehold office building, for

details relating to this matter see Winstons attached e-mail.

For the year ended 31 March 2015, each company in the group
made a trading loss and paid dividends as follows.
Company

Trading
loss

Dividends
paid

Arc Ltd

81,000

27,000

Bend Ltd

48,000

13,500

Curve Ltd

41,000

49,500

The Horizon Ltd group also includes two companies that are
resident in, and controlled from, the country of Slozobia. The
results of each company for the year ended 31 March 2015 are
as follows:
Company

Chargeable
Profits

Dividends
paid

Deep Inc

480,000

237,120

Even Inc

810,000

360,000

Foreign corporation tax was paid at 10% and the dividends paid
are the actual amounts paid and are stated before deducting
withholding tax at 7%.
-

10

Calculate the corporation tax liability of Horizon Ltd based on the

above figures after taking into account the details of the capital
gain included in Winstons email. In doing your calculation you
should assume that Horizon Ltd will be subject to a controlled
foreign company charge as none of the exceptions apply. When
preparing the tax liability for Horizon Ltd you should take
advantage of any opportunities available to reduce the total
corporation tax liability of the group. I want you to assume that
the maximum amount of losses are transferred from group
companies. Remember that Horizon Ltd acquired the shares in
Bend Ltd on 1 September 2014 from another company Straight
Ltd. You should list any assumptions you have made in arriving
at your answer.

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(ii)

New overseas branch

Horizon Ltd is hoping to set up a new operation overseas. The directors are
aware of the taxation of overseas subsidiaries but are interested in setting
this new operation up as a branch of Horizon Ltd. Trading losses are
expected initially but the company hopes that by year 3, the business will
generate taxable trading profits of 200,000 per annum.
Foreign
corporation tax will be suffered on this at a rate of 28%.
Your notes should include details of
-

How the profits/losses of an overseas branch are treated in the UK.

Whether the exemption election available for overseas branches

should be made by Horizon Ltd.

(iii) Research and Development

Winston will provide you with details of a planned research project to be
undertaken during the year ended 31 March 2016. Winston would like to
see calculations to show the effect of the alternative treatments to quantify
the difference in tax payable between the options.
(iv) Relocation of director
Another director of Horizon Ltd, Rob, is being relocated to Slozobia to
oversee a new project for Deep Inc. The move in planned to take place on 1
November 2015.
The project may take anything from four to six years to complete and so
Rob is unsure whether or not to sell his house in the UK, and buy a
replacement in Slozobia, and if so, when it would be best to sell it.
He has two main concerns if he keeps the house:
- He will rent the house out to tenants and is unsure whether this income
will be subject to tax in the UK.
- He is aware that he can claim PPR on the sale of the house, but is worried
that the relief will be affected if he keeps the house whilst not living in it.
Email from Winston
The corporation tax liability for the year ended 31 March 2015
Following on from our discussion of the results of the Horizon Ltd group, I
have now identified that Horizon Ltd sold a freehold building on 15 June
2014 for 242,000 and this resulted in a capital gain of 52,000. During
April 2015, Arc Ltd and Bend Ltd will purchased freehold factories for
210,000 and 235,000 respectively. I am not sure if this will affect
Horizon Ltd's corporation tax.
Research and Development
Horizon Ltd qualifies as a large company for the purposes of research and
development. During the year ended 31 March 2016, we are planning on
undertaking some research for a planned expansion of our products. The
forecasts suggest that the research will incur costs totalling 80,000 during
the year. We anticipate that the companies trading profits, before any relief
for this research expenditure, will amount to 165,000 before any
deduction is made for the research costs. Due to recent trading results, we

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11

do not anticipate receiving any dividends from the companies we have

invested in.
I am aware that relief is available for such costs, but I understand there are
two options as to how the relief can be given, so would be interested to see
which of the two works best for us.

Extracts from the client files for the Horizon Ltd group

Shareholders

Horizon
Ltd

Arc
Ltd

Bend
Ltd

Curve
Ltd

Deep
Inc

Even
Inc

Various

Horizon Ltd
(80%)

Horizon Ltd
(60%)

Horizon Ltd
(20%)

Horizon Ltd
(60%)

Horizon Ltd
(6%)

Zero Ltd
(20%)

Zero Ltd
(40%)

Zero Ltd
(80%)

1.9.14

3.6.11

(<50% each)

Shares acquired
by Horizon Ltd

1.7.12

1.5.13

1.8.12

VAT registered

Yes

Yes

Yes

Yes

N/A

N/A

Trading company?

Yes

Yes

Yes

Yes

Yes

Yes

Residency

UK

UK

UK

UK

Slozobia

Slozobia

Required:
Prepare the notes requested in the e-mail from your manager.
following marks are available:

The

(i)

The corporation tax for Horizon Ltd for the year ended 31 March
2015.
(13 marks)

(ii)

Overseas branch set up.

(4 marks)

(iii) Research and development.

(4 marks)

(iv) Relocation of director

(4 marks)
(25 marks)

12

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Section B TWO questions ONLY to be attempted

3

Roselea requires advice on the inheritance tax payable on death and on the
gift of a property, and on the capital gains tax due on a disposal of shares,
together with the relief available in respect of the purchase of seed enterprise
investment scheme shares.
Roselea and her parents:

Roselea receives an annual salary of 75,000, and is resident and

domiciled in the UK.

Roseleas father, Paul, died on 1 June 2007.

Roseleas mother, Rose, died on 1 October 2014.

Both Paul and Rose were resident and domiciled in the UK.

Paul lifetime gifts and gifts on death:

Paul had not made any lifetime gifts.

In his will, Paul left cash of 80,000 to Roselea and 115 acres of
farmland situated in Scotland to Roseleas brother. The market value of
the farm was 135,000, although its agricultural value was only
55,000. Paul had acquired the land on 1 January 2000 and granted an
agricultural tenancy on that date.

Paul left the remainder of his estate to his wife, Rose.

Rose lifetime gifts and gifts on death:

On 1 February 2010, Rose gave Roselea 375,000 shares in Verde plc.

Rose had made no other lifetime gifts.

Rose gift of 375,000 shares in Verde plc to Roselea:

1 January 2006 -

Rose purchased 375,000 shares for 420,000.

1 February 2010 -

Rose gave all of the shares to Roselea.

The shares were quoted at 1.84 - 1.96.
The highest and lowest marked bargains were
1.80 and 1.92.

The shares did not qualify for business property relief or capital gains
tax gift relief.

Acquisition of Verde plc by Chromatic plc and subsequent bonus issue:

1 January 2011 -

Chromatic plc acquired the whole of the ordinary

share capital for Verde plc.
Roselea received 30 pence and two ordinary
shares in Chromatic plc, worth 1 each, for each
share in Verde plc.
The takeover was for genuine commercial reasons
and not for the avoidance of tax.

1 July 2012 -

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Chromatic plc declared a 2 for 1 bonus issue.

13

Roseleas actual and intended capital transactions in the tax year

2014/15:

15 November 2014
1 April 2015

Sale
Purchase

1,000,000 shares in
Chromatic plc in
Qualifying seed enterprise
investment scheme
SEIS shares

445,000

80,000

Roselea gift of a UK property:

Roselea intends to give a UK property to her son on 1 October 2015.

Roselea intends to continue to use this property, rent-free, such that

this gift will be a gift with reservation.

Required:
(a)

Calculate the inheritance tax payable in respect of Roses gift of

the shares in Verde plc, as a result of her death.
(7 marks)

(b)

(i)

Calculate Roseleas capital gains tax liability for the tax year
2014/15 on the assumption that seed enterprise
investment scheme (SEIS) relief is claimed in respect of the
shares to be purchased on 1 April 2015 and that
entrepreneurs relief is not available.
(6 marks)

(ii)

State the capital gains tax implications of Roselea selling

the SEIS shares at some point in the future.
(3 marks)

(c)

Explain how the proposed gift of the UK property will be treated

for the purposes of calculating the inheritance tax due on
Roseleas death.
(4 marks)
(20 marks)

14

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Neil has been a client of your firm for a number of years and has asked for
your advice regarding the disincorporation of his company and the use of the
forecast trading losses of the business. Neils wife Jenny has also asked for
some advice regarding a possible personal pension contribution.
Scoot Ltd

Incorporated and began trading on 1 January 2008, manufacturing and

selling furniture to retail outlets.

The only asset owned is Goodwill. This was created since the company
began trading and was valued at 85,000 on 31 March 2015.

Has plant and machinery on which capital allowances are claimed each
year. The tax written down value at 31 March 2015 amounted to 800
although the machinery was valued at 2,000.

Adjusted profits for the year ended 31 March 2015 amounted to just
18,000 but forecasts suggest the business will make tax adjusted
losses for the year ended 31 March 2016 of 65,200, before taking
account of any capital allowances available.

Business was transferred as a going concern to Neil on 1 April 2015.

Neil

Born 20 August 1978 and married to Jenny.

Has income for tax years 2011/12 to 2015/16 consisting of 25,000 of

property income (from an investment property) and 13,500 of
dividends from Scoot Ltd.

Jenny

Born 8 May 1980 and married to Neil.

Works for a bank earning, her annual salary is 95,000.

Made regular personal pension contributions of 25,000 (gross) per

annum since 2009/10.

Made a personal pension contribution in 2014/15 of 75,000 (gross).

Neil and Jenny

Have considerable joint bank savings on which interest is received each

year of 24,000 (net).

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15

Required:
(a)

Advise Neil as to whether disincorporation relief will be available

on the transfer of trade from Scoot Ltd to him personally on
1 April 2015, the effect that a claim for the relief will have on the
corporation tax liability of Scoot Ltd and the time limit for any
claim.
(4 marks)

(b)

(i)

Advise Neil as to possible ways in which the anticipated loss

for the year to 31 March 2016 can be relieved assuming the
disincorporation takes place as planned and Neil trades as a
sole trader from 1 April 2015.
(4 marks)

(ii)

Assuming Neil claims relief for the loss in the best possible
manner, calculate the maximum tax saving which can be
achieved.
(7 marks)

(c)

Explain, with supporting calculations, how Jenny obtains tax

relief for the personal pension contribution in 2014/15 and show
the net cost of her making a gross contribution of 75,000.
(5 marks)
(20 marks)

16

w w w . s t ud yi nt e r a c t i ve . o r g

The management of Zeta Ltd require advice on the proposed acquisition of

some new business premises, they also want to know whether it is advisable
from a tax point of view to restructure the group.
The following information has been extracted from client files and from
meetings with the directors of Zeta Ltd.
Zeta Ltd Group

Zeta Ltd owns the whole of the share capital of Omicron Ltd, Gamma Ltd
and Mu Ltd.

The group was formed on 1 January 2006 when all four companies
began trading.

All of the companies are UK resident and prepare accounts to 31 July

each year.

VAT

Zeta Ltd and Gamma Ltd make standard rated supplies and are
registered separately for the purposes of VAT.

Omicron Ltd and Mu Ltd make exempt supplies only.

Additional business premises

On 1 June 2014, Zeta Ltd paid a premium of 240,000, inclusive of VAT,

to acquire the 20 year lease of commercial premises for use in its trade.
Zeta Ltd will pay rent of 19,200 per annum, inclusive of VAT, for the
premises.

Group results

At 31 July 2014, Omicron Ltd has unused trading losses of 36,000.

The budgeted taxable trading profits for the trades carried on by the
Zeta Ltd group for the year ended 31 July 2015 are as follows:
Zeta Ltd
Taxable trading profits

216,000

Omicron
Ltd

26,000

Gamma
Ltd

70,000

Mu Ltd

1,160,000

Group restructuring

It is proposed that the Zeta Ltd group will be restructured by the trades
and assets of Omicron Ltd, Gamma Ltd and Mu Ltd being sold to Zeta
Ltd. Zeta Ltd will then operate all four trades and the three subsidiary
companies will become dormant.

If the restructuring takes place, it will have effect for the whole of the
year ending 31 July 2015.

The restructuring is being carried out for commercial reasons although

the directors will not proceed with it, if it is going to give rise to
significant additional tax costs.

The assets owned by the three subsidiaries consist of business premises,

plant and machinery and goodwill in addition to net current assets.

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17

Schedule 5 EMI share option scheme

It is proposed that Zeta Ltd will establish a Enterprise Management

Incentive (EMI) share option scheme for key employees. The terms will
be as follows

Each key employee will be granted an option to acquire 10,000

shares at 1.75 per share.

The options will be exercised in 5 years time when the shares

are expected to be worth 7 each. An ordinary share in Zeta Ltd
is expected to be worth 3 when the options are granted.

Required:
(a)

Advise Zeta Ltd of the corporation tax and VAT implications of

the payments made to the owner of the premises in respect of
the lease in the year ended 31 July 2015.
(3 marks)

(b)

Explain the immediate tax implications of the restructuring of the

Zeta Ltd group.
(4 marks)

(c)

Explain the effect on the total corporation tax payable by the

group for the year ended 31 July 2015 if the group is
restructured compared to its current position.
You should
illustrate
your
conclusions
using
relevant
supporting
calculations.
(5 marks)

(d)

Explain what effect the restructuring would have on the groups

ability to recover attributable and non- attributable input tax.
(3 marks)

(e)

Explain the income tax and capital gains tax implications for the
employees in respect of the grant and exercise of the options
and on the sale of the shares, including details of any available
reliefs.
(5 marks)
(20 marks)

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