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Question 1b i

Your manager has received schedules of information from Ray and Shanira in connection with their personal tax affairs. These schedules and an extract from an email from your manager are set out below.

Schedule of information from Shanira — dated 8 June 2016
I was born in 1960. I am resident and domiciled in the UK. 
Ray and I are getting married on 17 September 2016.

Gifts from Shanira to Ray
On 1 February 2016, I gave Ray a house situated in the country of Heliosa. We have only ever used this house for our holidays. The house was valued at £360,000 at the time of this gift. I purchased the house on 1 September 1999 for £280,000.

Additional information in relation to Shanira
- Shanira is a higher rate taxpayer. 
- The gift of the house to Ray on 1 February 2016 was Shanira's first lifetime gift. 
- You should use the current market values of the painting and the shares in Solaris plc in order to calculate the chargeable gains arising on these gifts.
- Neither gift relief nor entrepreneurs' relief will be available in respect of the proposed gift of the shares in Solaris plc. 
- Shanira has not made any other chargeable disposals since 5 April 2015. 
- There is capital gains tax in the country of Heliosa but no inheritance tax. 
- There is no double tax treaty between Heliosa and the UK.

Please prepare a memorandum for the client files which addresses the following issues: 
(b) Gifts from Shanira to Ray 
(i)
— A calculation of the capital gains tax payable in respect of the gift of the house in Heliosa based on the currently available information, together with any further information required to finalise the liability, and the due date of payment.

— An explanation, with supporting calculations, of when the further gifts should be made to Ray. The objective here is to maximise Ray's capital gains tax base cost without creating a capital gains tax liability for Shanira. 
In order to achieve this objective, you should consider dividing the proposed gift of the shares into two gifts to be given on different days.

Tax manager

Required: Prepare the memorandum as requested in the email from your manager.
 The following marks are available:
 (b) Gifts from Shanira to Ray.
      (i) Capital gains tax. (10 marks)