Question 1 Khalli arrives in the UK at 3pm on 1 October 2010. He stays in the UK until 4pm on 24 December 2010.

He then arrives back in the UK at 8am on 2 January 2011 but leaves again on the same day at 10pm. Finally, he arrives in the UK at 9am on 20 January 2011 and stays in the UK until 10pm on 10 May 2011. What periods is he treated as being resident in the UK?

Question 2 Hans has always lived in Austria. He comes to the UK on 1 July 2010 and returns to Austria on 1 March 2011. What is his period of stay in the UK?

Question 3 Jennifer has always lived in the UK. She goes on a year long trip around the world starting 1 June 2010. She returns to the UK on 31 May 2011. Is she treated as being UK resident?

Question 4 Sarahs employer wants to send her abroad for fifteen months to work in an overseas office. Sarah has the option to start the assignment either on 1 March 2010 returning on 31 May 2011, or on 1 June 2010 returning 31 August 2011. She has always been UK resident and ordinarily resident. She will return to the UK for two weeks during the period. Explain the tax implications and when she should start.

Question 5 Claudia has been UK resident for five years, but is not domiciled in the UK. In 2010/11, she has UK source income of 30,000 and overseas income of 5,000, of which she has remitted 1,000 to the UK. Claudia is not entitled to the remittance basis automatically because she has unremitted overseas income of (5,0001,000)=4,000. Should she claim for the remittance basis?

Question 7 Nathan has been resident in the UK for tax purposes since 1996 but is not uk domiciled. In 2010/11 he has the following income: UK trading income Non-UK trading income 10,000 85,000

He remits 10,000 of his non-UK trading income to the UK. Should he claim the remittance bases?

Question 8 A UK resident, ordinarily resident and domiciled individual has the following income for 2010/11. UK salary Interest on foreign debenture (net of foreign tax at 5%) Foreign rents (net of foreign tax at 60%) Assuming maximum DTR is claimed, show the UK tax liability 36,745 4,750 1,500

Question 9
Bruce Cobber, an entrepreneur, was born on 8 June 1958 and has lived in the UK for the last 12 years. He is domiciled in Australia. He is married to Sheila who is UK domiciled. Bruce s sources of income and gains are summarised in the table below: Source Gumtree House Cobber Cuisine Ltd Gorgeous Gardens Ltd (Australian duties) Gorgeous Gardens Ltd (UK duties) National Buses plc bonds JCI plc Ordinary shares Bank to which credited Natabbey Natabbey National Bank of Australia Natabbey Natabbey Natabbey Country in which bank situated UK UK Australia UK UK UK

Bruce has been operating Gumtree House in a sole trader capacity as a restaurant in an English south coast resort since he bought it on 1 September 1997 for 257,950 including incidental costs of acquisition. His tax adjusted trading profit for the final year of trading ended 31 August 2011 is 13,200. Early in 2011, Bruce received an offer of 687,500 for Gumtree House from a developer which he accepted. Exchange of contracts took place on 1 July 2011 with completion on 1 September 2010. The costs of sale amounted to 7,700. Bruce identified another restaurant in Northern England called Mountain View, which he had bought for 748,000 through the medium of his solely owned UK registered limited company, Cobber Cuisine Limited. The company completed the purchase on 1 September 2011 and commenced trading immediately. In addition to the net proceeds from the sale of Gumtree House Bruce had to raise a further 132,000 in order to effect the acquisition of Mountain View. He achieved this by transferring 22,000 from his account with the National Bank of Australia and by borrowing 110,000 from the Natabbey Bank in the UK. The loan is a capital repayment loan. The interest paid and capital repaid during the year ended 5 April 2011 were 7,040 and 14,080 respectively. The interest was paid gross. Bruce pays himself director s remuneration of 1,100 per month from Cobber Cuisine Ltd. The tax deducted under PAYE from his director s remuneration in the period to 5 April 2012 was 591. Bruce owns 35% of the shares in Gorgeous Gardens Limited (GG). The company is based in the UK and Bruce is the technical director. GG has two divisions, the camping division and the garden centres' division. The camping division operates exclusively in Australia whereas the garden centres division operates exclusively in the UK.

Bruce works for both divisions. He has a separate employment contract for each set of duties. His remuneration in respect of his Australian activities in Sterling equivalent terms is 25,000. His remuneration in respect of his UK duties is 8,000. The remuneration for both contracts is paid by GG Ltd with the duties in Australia being paid directly into Bruce s Australian bank account. The rate of tax suffered by Bruce on the income paid in Australia is 30%.
Bruce also owns a substantial estate in Queensland, Australia, which he and his extended family use as a holiday home. Bruce owns the following financial investments: 900 of National Buses plc 9% Convertible Capital Bonds 2013 (quoted in the UK) 1,100 JCI plc ordinary shares (registered in the UK) Bruce received cash dividends of 297 from JCI plc in the year ended 5 April 2012. Bruce made a self assessment payment on account on 31 January 2012 of 2,860 and is due to make a second on 31 July 2012, also of 2,860. Bruce made no other capital disposals during 2011/12. Required: (a) Calculate the capital gains tax payable on the disposal of Gumtree House, assuming Bruce claims Entrepreneurs relief and has made no previous claims. (3 marks) (b) Explain the options available to Bruce in respect of the UK tax payable on his foreign income, and advise which he should choose. You do not need to do any calculations in this section. (7 marks) (c) Assuming that Bruce chooses to pay tax on his worldwide income, calculate his income tax payable for the year ended 5 April 2012. (7 marks) (d) Calculate Bruce s self assessment balancing payment for the year ended 5 April 2012 and the payments on account of his 2012/13 self assessment liability.(4 marks) (e) Explain the inheritance tax considerations that Bruce should take into account when transferring property to Sheila. (2 marks) (Total: 23 marks)