代写33179 Taxation: Principles and Planning帮做R程序

Assignment Remit

Module Learning Outcomes:

This assignment is designed to assess the following module learning outcomes. Your

LO5.   Evaluate a real life-scenario to provide tax planning advice in areas such as: the choice of business form, personal taxation, loss relief, capital gains tax, inheritance tax, capital expenditure or VAT.

Assignment:

You are a tax executive working at Hayling Associates based in Birmingham. One of your clients, Mohammed, has approached your firm for some capital gains tax advice. One of the assistant tax advisers has prepared some initial calculations and asked if you can check them for accuracy.

Information about your client and their capital gains tax position

Mohammed is retired and receives pension of £20,200 per year. He also received dividends from his investments in the UK companies totalling £8,000 in the 2024/25 tax year.

In addition to these earnings, Mohammed owns three properties, a cottage in Devon, a piece of land and a house in Sheffield. Mohammed sold two of these properties in 2024/25, namely the cottage and the piece of land, and the details relating to each are provided below:

1.        A small cottage in Devon, which he had inherited from his great-grandfather in January 1998, when its value was £60,000. His grandfather paid £40,000 to purchase the cottage in December 1991. Mohammed has never used this property as his main residence, but rather used it as a summer holiday cottage. He had added a conservatory to the property at a cost of £9,500 in June 1999. In May 2024, he sold the property for £300,000. The legal and estate agent’s fee he incurred on the disposal of the property amounted to £3,500.

2.        A vacant 5-hectare plot of land, which he sold in January 2025 for £45,000. The plot was part of a 13-hectare plot originally bought by Mohammed for £41,000 in October 1995 and not used by him as a business asset, nor is it associated with a residential property. Solicitor’s fees associated with the sale of the land were £2,500. The remaining 8-hectare plot was valued at £82,000 in January 2025.

Initial calculations prepared by the assistant tax adviser

The assistant tax adviser has provided you with the following draft income tax computation and draft capital gains tax computation for Mohammed for the 2024/25 tax year.

Further information about your client

Mohammed also has a house in Sheffield, which he has not yet sold. He is not sure whether to sell it in March 2025, or postpone the sale until the next tax year. He purchased on 1 July 2015 for £120,000 and took up immediate residence. On 1 January 2016, Mohammed’s empIoyer required him to live and work in the United States, where he stayed until 30 June 2018. On 1 July 2018, he returned to the UK to work for the same employer - however, due to a change in his role he was required to work in Scotland. Mohammed’s roIe requires him to be physicaIIy present at his empIoyer’s premises every day. This meant that during his time working in Scotland it was necessary for him to occupy rented accommodation in Scotland because it is not feasible to commute from Sheffield to Scotland every day. On 1 July 2019, Mohammed resigned from his job in Scotland to go and live with his parents in Birmingham, as they needed his support. He is still living in Birmingham, and he is intending to sell his house in Sheffield for £200,000 and he expects soIicitor’s fees and estate agent’s fees related to the sale to be £1,500 and £2,100, respectively.

Initial calculations prepared by the assistant tax adviser

The assistant tax adviser has prepared a separate calculation of the capital gain assessable on Mohammed for the sale of his house in Sheffield, showing both exempt and chargeable periods.

Capital gain assessable on Mohammed for the sale of the house in Sheffield

Total months                                                                    117

Exempt months                                                                 45

Chargeable months                                                           72

                                                                                                                                  £

Sale proceeds                                                                                                     120,000

Less: incidental costs of disposal (1,500 + 2,100)                                                    (3,600)

Gain                                                                                                                  116,400

Less: PPR exemption                                                           116,400       x 72/117 (71,631)

                                                                                                                           44,769

PART A: REVIEW OF THE WORK PREPARED BY THE ASSISTANT TAX ADVISER (35%)

i)     Review the assistant tax adviser's calculations for accuracy, and draft an email to the assistant tax adviser, which:

a.    explains any errors you find and why they need to be corrected, and    (20 marks)

b.    offers guidance on how they could improve their knowledge of capital gains tax.   (15 marks)

(TOTAL FOR PART A: 35 MARKS)

PART B: CALCULATIONS (15%)

Prepare the following revised computations and calculations:

o Mohammed’s income tax computation for 2024/25 .  (3 marks)

o Mohammed’s capitaI gains tax computation for 2024/25, caIcuIated in the most tax efficient way (assuming he does not sell his house in Sheffield in the 2024/25 tax year). (9 marks)

o A separate calculation of the capital gain assessable on Mohammed for the sale of his house in Sheffield, showing both exempt and chargeable periods. (3 marks)

(TOTAL FOR PART B: 15 marks)

PART C: REPORT TO MOHAMMED (40%)

Prepare a report addressed to Mohammed to provide advice in terms of his capital gains tax liability associated with the sales of his properties.  This should include the impact of selling his house in Sheffield in 2024/25 compared to selling it in 2025/26 (based on your calculations in (a)). Include any relevant recommendations that he could consider to minimise his capital gains tax liability through tax planning. Your report should include the following information:

1.   The most tax efficient way of treating the chargeable gain on the properties already sold in 2024/25, explaining how these savings are achieved.

2.    A clear recommendation of whether Mohammed should sell his house in Sheffield in 2024/25 or 2025/26, explaining how the recommended option is more tax efficient.

3.    An explanation of why Mohammed’s house in Sheffield is only partially exempt from capital gains tax as his private residence. What could he have done differently in the  past to increase the exempt portion of the chargeable gain?

The remaining 10% of marks will be awarded for communication style.

Notes on the task:

•    Your answer should include the following items:

1.    an email to the assistant tax adviser (as your answer to part a)

2.    a report to the client, Mohammed (as your answer to part c)

3.    an appendix with calculations (as your answer to part b)

Each item should be written separately and started a new page within your submission document. Please only submit one document.

•    All tax calculations should be in accordance with the Finance Act 2024 (tax year 2024/25).

•    Assume that the tax rates and allowances are the same in 2025/26 as they are in 2024/25.

•    For the purposes of the calculation of the gain on the sale of the house in Sheffield, you should assume that Mohammed sells the property on either 31 March 2025 (if sold in 2024/25 tax year) or on 6 April 2025 (if sold in the 2025/26 tax year)

•    The principal private residence (PPR) partial exemption should be calculated to the nearest month (i.e., round up to the end of the month if the date of disposal falls in the second half of the month and round down to the start of the month if the date of disposal falls in the first half of the month).

•    Please ensure computations are clearly presented and that workings are shown for all calculations.  There are some marks available in the marking scheme for presentation. Computations and workings should be shown in an appendix to the report.

•    The word limit is a maximum of 1,500 words.  Reports that exceed this will be penalised with the following grade point deductions:

o Up to 10% over: no penalty

o 11% to 20% over: 5% penalty

o 21% to 30% over: 10% penalty

o More than 30% over: 15% penalty

Tables, figures, the reference list, and the appendix do not count towards the word count.

•    Please ensure that the structure follows that of a report format with clear headings. Remember reports are formal documents which can include headings, sub-headings, numbered sections, and graphics such as tables, flow charts, diagrams, or graphs (where appropriate).  All these devices help the reader navigate the report and understand its content. However, please ensure that any tables, and/or graphics are referred to in the main body of the report.

•    The use of external sources must be appropriately cited and referenced.  You are required to use the Harvard referencing style.

•    If you have any questions related to the assignment, please use the discussion forum on Canvas or speak to the module leader in class.

•    Please read the discussion forum prior to submitting your work to ensure you have read all information relevant to this assignment.

Grading Criteria:

Your submission will be graded according to the following criteria: