Notes (a) Legal and professional fees 850 relates to the provision of legal advice in respect of an alimony dispute between Charles Ryder and his ex-wife. 1,000 relates to a fee by a tax consultant for some advisory services provided to Brideshead Ltd. This fee relates wholly and exclusively to Brideshead Ltd's trading activities. Entertaining 20,000 relates to gifts of food hampers to Brideshead Ltd's existing and prospective customers. Each hamper has a unit cost price of 45. Conspicuous advertisements for Brideshead Ltd were included on the front of each of the hampers. 10,625 relates to the cost of entertaining employees of Brideshead Ltd. Charles Ryder has a keen personal interest in heritage property and antiques. Charles acquired an antique cabinet on 10 January 2017 at a cost of 20,000. Charles also made the following disposals during the year ended 5 April 2017: 1 November 2016 1 January 2017 20 March 2017 Antique painting Antique chair National Savings Premium Bonds 30,000 70,000 26,000 The antique painting was acquired in July 2004 at a cost of 20,000. The antique chair was acquired in August 1999 at a cost of 30,000. The National Savings Premium Bonds were initially acquired in May 2000. Charles disposed of the antique cabinet at auction on 7 March 2017. Disposal proceeds were 47,000. Auctioneer's fees on the sale were 1,000. Losses brought forward at 5 April 2016 were 20,000. Charles Ryder's highest marginal rate of income tax in 2016/17 is 45% (the additional rate for non-savings and savings income). The following information is also relevant for the tax year 2016/17: (1) During the tax year to 2016/17, Brideshead Ltd received investment income from non- trade loan relationships of 170,000. Brideshead Ltd's interest payable as a result of non-trade loan relationships was 20,000. Dividend income from investments in other companies totalled 220,000. (2) Brideshead Ltd made qualifying donations to charity of 5,000 on 30 December 2016 and 10,000 on 1 May 2017. (3) Brideshead Ltd have decided not to claim any capital allowances. Charles Ryder stated: 'We claim depreciation in the calculation of financial statement profit, so what's the point in claiming capital allowances, too?' (4) Charles Ryder's personal beliefs have an effect on his management approach at Brideshead Ltd. Charles does not believe in 'climate change': as a result, Brideshead Ltd do not invest in environmentally friendly plant and machinery. Cars acquired by the company tend to be highly polluting. Required: (a) Calculate Brideshead Ltd's corporation tax payable for the period ending 31 March 2017. (17 marks) (b) State the dates by which the corporation tax return must be submitted and the dates by which any payments of corporation tax must be paid. (3 marks) (c) Critically evaluate the effects of Charles Ryder's views on the capital allowances that can be claimed by Brideshead Ltd. (7 marks) (d) Calculate Charles Ryder's capital gains tax liability for the year ended 5 April 2017. (8 marks) Brideshead Ltd is a UK registered company that provides property maintenance and management services. Brideshead Ltd has been trading for many years and prepares financial statements to 31 March. Brideshead Ltd has always been profitable. Brideshead Ltd receive grant income from the UK government to maintain and manage a large portfolio of heritage properties. The company also generates income from a range of other sources. These other sources include investments in other companies and investments in financial products. During the tax year 2016/17, Brideshead Ltd acquired the following items of plant and machinery: Date Item Cost 8 April 2016 Heavy lifting equipment 180,200 30 June 2016 Lorries 150,000 30 November 2016 Car (CO2 emissions 160g/km) 20,000 1 February 2017 Car (CO2 emissions 140g/km) 20,000 Brideshead Ltd is owned by Charles Ryder. Charles is also chief executive of the board of Brideshead Ltd. The car purchased on 1 February 2017 was made available for private use by Charles. 40% of the total distance travelled by the car was due to private use by Charles. Tax written down values for Brideshead Ltd as at 1 April 2016 were as follows: Main pool Car (CO2 emissions 150g/km) 144,200 12,127 The car with emissions of 150g/km was sold for 12,500 on 10 November 2016. The original purchase price of this car was 15,000. Net profit per the financial statements for the year ended 31 March 2017 was 575,870. This figure was stated after the deduction of the following items of expenditure: Depreciation Legal and professional fees (a) Entertaining (b) Gifts to employees School fees for Charles Ryder's children Private dental insurance for Charles Ryder 86,000 1,850 30,625 8,005 40,500 1,000 Notes (a) Legal and professional fees 850 relates to the provision of legal advice in respect of an alimony dispute between Charles Ryder and his ex-wife. 1,000 relates to a fee by a tax consultant for some advisory services provided to Brideshead Ltd. This fee relates wholly and exclusively to Brideshead Ltd's trading activities. Entertaining 20,000 relates to gifts of food hampers to Brideshead Ltd's existing and prospective customers. Each hamper has a unit cost price of 45. Conspicuous advertisements for Brideshead Ltd were included on the front of each of the hampers. 10,625 relates to the cost of entertaining employees of Brideshead Ltd. Charles Ryder has a keen personal interest in heritage property and antiques. Charles acquired an antique cabinet on 10 January 2017 at a cost of 20,000. Charles also made the following disposals during the year ended 5 April 2017: 1 November 2016 1 January 2017 20 March 2017 Antique painting Antique chair National Savings Premium Bonds 30,000 70,000 26,000 The antique painting was acquired in July 2004 at a cost of 20,000. The antique chair was acquired in August 1999 at a cost of 30,000. The National Savings Premium Bonds were initially acquired in May 2000. Charles disposed of the antique cabinet at auction on 7 March 2017. Disposal proceeds were 47,000. Auctioneer's fees on the sale were 1,000. Losses brought forward at 5 April 2016 were 20,000. Charles Ryder's highest marginal rate of income tax in 2016/17 is 45% (the additional rate for non-savings and savings income). The following information is also relevant for the tax year 2016/17: (1) During the tax year to 2016/17, Brideshead Ltd received investment income from non- trade loan relationships of 170,000. Brideshead Ltd's interest payable as a result of non-trade loan relationships was 20,000. Dividend income from investments in other companies totalled 220,000. (2) Brideshead Ltd made qualifying donations to charity of 5,000 on 30 December 2016 and 10,000 on 1 May 2017. (3) Brideshead Ltd have decided not to claim any capital allowances. Charles Ryder stated: 'We claim depreciation in the calculation of financial statement profit, so what's the point in claiming capital allowances, too?' (4) Charles Ryder's personal beliefs have an effect on his management approach at Brideshead Ltd. Charles does not believe in 'climate change': as a result, Brideshead Ltd do not invest in environmentally friendly plant and machinery. Cars acquired by the company tend to be highly polluting. Required: (a) Calculate Brideshead Ltd's corporation tax payable for the period ending 31 March 2017. (17 marks) (b) State the dates by which the corporation tax return must be submitted and the dates by which any payments of corporation tax must be paid. (3 marks) (c) Critically evaluate the effects of Charles Ryder's views on the capital allowances that can be claimed by Brideshead Ltd. (7 marks) (d) Calculate Charles Ryder's capital gains tax liability for the year ended 5 April 2017. (8 marks) Brideshead Ltd is a UK registered company that provides property maintenance and management services. Brideshead Ltd has been trading for many years and prepares financial statements to 31 March. Brideshead Ltd has always been profitable. Brideshead Ltd receive grant income from the UK government to maintain and manage a large portfolio of heritage properties. The company also generates income from a range of other sources. These other sources include investments in other companies and investments in financial products. During the tax year 2016/17, Brideshead Ltd acquired the following items of plant and machinery: Date Item Cost 8 April 2016 Heavy lifting equipment 180,200 30 June 2016 Lorries 150,000 30 November 2016 Car (CO2 emissions 160g/km) 20,000 1 February 2017 Car (CO2 emissions 140g/km) 20,000 Brideshead Ltd is owned by Charles Ryder. Charles is also chief executive of the board of Brideshead Ltd. The car purchased on 1 February 2017 was made available for private use by Charles. 40% of the total distance travelled by the car was due to private use by Charles. Tax written down values for Brideshead Ltd as at 1 April 2016 were as follows: Main pool Car (CO2 emissions 150g/km) 144,200 12,127 The car with emissions of 150g/km was sold for 12,500 on 10 November 2016. The original purchase price of this car was 15,000. Net profit per the financial statements for the year ended 31 March 2017 was 575,870. This figure was stated after the deduction of the following items of expenditure: Depreciation Legal and professional fees (a) Entertaining (b) Gifts to employees School fees for Charles Ryder's children Private dental insurance for Charles Ryder 86,000 1,850 30,625 8,005 40,500 1,000