Tx notes fa22 Final

June 2023 to March 2024 exams
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Chapter 23
 
Answer to Example 1
 
 
 
 
Photo Plc
Corporation tax liability:
All payable by instalments
This will be paid as follows:
£95,000
on
14 July 2023
£95,000
on
14 October 2023
£95,00
on
14 January 2024
£95,000
on
14 April 2024
Chapter 24
 
 
Answer to Example 1
 
 
 
 
FY 2022 £2M x 3/12 x 19% =
95,000
FY 2023 £2M x 9/12 x 19%(assumed) =
285,000
380,000
2008/9 CLT
16 July 2008
2014/15 PET
1 August 2014
2014/15 CLT
10 September 2014
Transfer of Value
320,000
120,000
338,000
Less Exemptions: CY
2008/09 (3,000)
2014/15 (3,000)
2014/15 0
PY
2007/08 (3,000)
2013/14 3,000)
2013/14 0
Chargeable amount
314,000
114,000
338,000
NRB 2008/09
312,000
NRB 2014/15
325,000
Used in previous 7yrs
0
(314,500)
(312,000)
(10,500)
Taxable Amount
2,000
327,500
Lifetime tax due
@25% 500
@20% 65,500
Gross amount c/fwd
314,500
114,000
338,000

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284
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June 2023 to March 2024 exams
Watch free ACCA TX lectures
Answer to Example 2
 
 
 
 
The gift on 1 October 2010 to her son is a PET. This was not chargeable when made nor will it be 
chargeable on death as Dee survived for the required 7 years. The transfer is therefore exempt but 
will be deemed to have used the Annual Exemptions for 10/11 and 09/10.
The gift on 1 June 2011 is a CLT and was chargeable when made during lifetime, but not again on 
death as again Dee survived for 7 years.
The gift on 1 September 2017 is a PET and will be chargeable on death as Dee died within the next 7 
years.
Step 1
Compute the Chargeable Transfers: Lifetime tax 
AE 10/11 will have been applied to the 1 October 2010 PET despite it never becoming chargeable.
As the donor, Dee, paid the IHT, the transfer is a net transfer and therefore the excess over the nil 
rate band is taxed at 25%
Step 2
Lifetime Transfers Chargeable on Death: Additional tax
The PET on 1 September 2017 is now chargeable to IHT as the gift was made within 7 years of the 
date of death.
When calculating the tax it is necessary to look back seven years from September 17 to see if any 
gifts will use up the NRB. The CLT from June 2011 does use up the nil rate band.
1/6/11
1/9/17
 CLT
 PET
Transfer of value
336,000
296,000
Less: Exemptions
AE 11/12
(3,000)
AE 17/18
(3,000)
AE 16/17
(3,000)
Chargeable Transfer
333,000
290,000
 £
 Gross 
Transfers
IHT
1/6/11
CLT
333,000
335,000
2,000
325,000 @ nil 
= nil
8,000 @ 25% = 2,000
 Gross 
Transfers
IHT
1/9/2017
PET
290,000
116,000
No available nil rate band 
290,000

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285
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