Question 8:

1. Heavy Ltd runs a Retail Trading business in London prepared accounts for the year ended 31 March 2020. The following information is available:
2. The Profit and Loss Account of Heavy Ltd shows the Net profit before Tax for the year ended March 2020 was 1,800,000.
3. The above profit is after considering the following incomes:

4. Capital Gain by sale of land 40,000 (see note below)

   Interest Income 10,000

   Rental Income 25,000

5. The above profit is calculated after deducting the following expenses () :

1. The above profit is calculated after deducting the following expenses () :

Depreciation	80,000
Purchase of new printer	2,000
Redecoration to the office building	1,000
Extension of Office building	8,000
Donation Political Party National Charity Local Charity	4,000 10,000 200
Gift and Entertainment Expenses: Customers Entertainment Staff Entertainment Gift to Staff Gift to Customers: Pen drive costing 10 each to 1000 customers Food hampers 5 each to 100 customers Cigarette packet 5 each to 50 customers	3,000 1,800 1,500 10,000 500 250
Car Lease Rent (CO2 emission = 140 gms)	9,000
Fines for not following the safety regulation	800

1. The following information is relevant for the calculation of Capital Allowances:

1. Heavy Ltd purchased the following plant and machineries:

Machinery for production purposes 1,120,000

Packing Machine 40,000

Furniture for office purposes 180,000

Car (CO2 Emission 90 grams per kilometer) 20,000

2. Heavy Ltd sold a machinery for 25,000. It was purchased by the company in 2012 for 50,000.

On 1 April 2019 the tax written down values of the Main Pool (general Pool) of Heavy Ltd was 80,000

1. The following information is relating to the capital gain by sale of land (which is included in the Profit and loss account):

On 1 July 2013 Heavy Ltd purchased a land for 60,000 and converted into a parking space for the staff on 10 December 2013 by spending additional capital cost of 20,000.

On 1/12/2019, Heavy Ltd sold this land for 150,000

The Indexation Factors are as follow:

July 2013 to Dec 2017	0.405
July 2013 to Sept 2019	0.412
Dec 2013 to Dec 2017	0.350
Dec 2013 to Sept 2019	0.582

1. Heavy Ltd deposited 100,000 in bank and received interest income of 8,000 which is in addition to the interest specified in Profit and Loss Account.

2. Heavy Ltd received Dividend income of 20,000 from Ash Ltd, a UK company. This income is not specified in Profit and loss account.

3. Heavy Ltd deposited money in bank in Singapore and received 20,000 interest from Singapore bank. Singapore Government has deducted 20% tax when sending interest income to UK. This income is not included in the profit and loss account.

Heavy Ltd had Trading loss of 30,000 for the year ended 31 March 2019

1. The details of the three separate companies are as mentioned below:

1. The Taxable Total Profit (TTP) of Exe Ltd is 2,000,000. Exe Ltd Incorporated in UK but the directors hold monthly board meetings overseas when major policy decisions are made.
2. Wye Ltd Incorporated overseas and all major decision taken overseas. Profit of the Company is 800,000

3. Required: you should help me in this question D+E+F

4. Calculate Taxable Total Profit (TTP) and the Corporation Tax Liability of Heavy Ltd for the year ended 31 March 2019 after claiming Double Taxation Relief for Interest income from Singapore.
5. (Show clearly the working for Capital Allowance, Adjusted Trading Profit, Capital Gain) (8 + 9 + 2 + 7 = 26 marks)
6. Ezd Ltd Incorporated overseas (TTP = 1,000,000) but the directors are based in UK and they often conduct board meetings in UK. You are tax adviser for the above companies and explain the tax incidence and the due date for payment of tax for each company. (word count = 200) (4 Marks)

7. (Total 30 marks)

8. Tax Summary

   Capital Gain Tax for Tax year 2019/20

   	Normal Assets	Residential Property
   If the Capital gain is within Basic rate Band (37,500)	10%	18%
   If the Capital gain exceeds the Basic rate Band	20%	28%

   Tax on Capital gains qualifying Entrepreneurs Relief = 10%

   Annual Exemption = 12,000