(c) QUESTION 4 (a) Explain the basis of assessment for Rental Income in Ireland. (2 marks) (6) Identify 4 specific types of expenses (other than capital allowances) which are deductible in computing net rents taxable under Case V, Schedule D. (4 marks) Maria and John are married and are jointly assessed for income tax purposes. During the tax year ended 31 December 2019, Maria earned the following rental income: Retail Shop Unit Gross rent is 12,300 per annum The rent due on this shop unit is paid quarterly in advance on 1 January, April, July & October each year. Due to cash flow difficulties the tenant did not pay the rent due on 1 October 2019 until 2 January 2020. The shop originally cost 300,000 on 1 January 1997. A loan was used to finance the purchase and the interest liability for year ended 31 December 2019 was 6,900, of which 1,600 was due at 31 December 2019. Factory Unit A new factory unit was purchased from a builder on 1 June 2019 for 430,000. The price was computed as follows: Site Cost 70,000 Site Development Cost 40,000 Construction Cost 170,000 Profit 150,000 Price Paid 430,000 Interest on a loan used as finance accrued evenly and was paid for six months, 13,500 (d) Interest on a loan used as finance accrued evenly and was paid for six months, 13,500 The tenant used the factory for manufacturing purposes on 1 August 2019 at annual rent of 54,000 per annum payable monthly in advance. REQUIREMENT Compute the assessable Case V income for 2019 (6 marks) lan granted a 21 year lease to Calvin on 1/1/2019 at 4,000 per annum rent and a lease premium of 250,000. Calvin granted a sub-lease for 14 years on 10/1/2019 to Jack, who uses the premises to carry on a trade, at a premium of 150,000 and annual rent of 13,500. REQUIREMENT Identify the Case V assessable income for Ian and Calvin for the tax year 2019. (4 marks) Discuss the conditions necessary for a supply of property to be within the charge of VAT (4 marks) Maria is considering using the Retail shop unit in the future for a new business. She is unsure when a new business must register for VAT. Explain when registration for Vat is compulsory and the procedure for VAT registration for the retail sale of goods. (5 marks) Total (25 marks) (e) (1) (c) QUESTION 4 (a) Explain the basis of assessment for Rental Income in Ireland. (2 marks) (6) Identify 4 specific types of expenses (other than capital allowances) which are deductible in computing net rents taxable under Case V, Schedule D. (4 marks) Maria and John are married and are jointly assessed for income tax purposes. During the tax year ended 31 December 2019, Maria earned the following rental income: Retail Shop Unit Gross rent is 12,300 per annum The rent due on this shop unit is paid quarterly in advance on 1 January, April, July & October each year. Due to cash flow difficulties the tenant did not pay the rent due on 1 October 2019 until 2 January 2020. The shop originally cost 300,000 on 1 January 1997. A loan was used to finance the purchase and the interest liability for year ended 31 December 2019 was 6,900, of which 1,600 was due at 31 December 2019. Factory Unit A new factory unit was purchased from a builder on 1 June 2019 for 430,000. The price was computed as follows: Site Cost 70,000 Site Development Cost 40,000 Construction Cost 170,000 Profit 150,000 Price Paid 430,000 Interest on a loan used as finance accrued evenly and was paid for six months, 13,500 (d) Interest on a loan used as finance accrued evenly and was paid for six months, 13,500 The tenant used the factory for manufacturing purposes on 1 August 2019 at annual rent of 54,000 per annum payable monthly in advance. REQUIREMENT Compute the assessable Case V income for 2019 (6 marks) lan granted a 21 year lease to Calvin on 1/1/2019 at 4,000 per annum rent and a lease premium of 250,000. Calvin granted a sub-lease for 14 years on 10/1/2019 to Jack, who uses the premises to carry on a trade, at a premium of 150,000 and annual rent of 13,500. REQUIREMENT Identify the Case V assessable income for Ian and Calvin for the tax year 2019. (4 marks) Discuss the conditions necessary for a supply of property to be within the charge of VAT (4 marks) Maria is considering using the Retail shop unit in the future for a new business. She is unsure when a new business must register for VAT. Explain when registration for Vat is compulsory and the procedure for VAT registration for the retail sale of goods. (5 marks) Total (25 marks) (e) (1)
