Posted: May 15th, 2024

AC6HU70O Personal and Corporate Taxation

AC6HU70O Personal and Corporate Taxation
Credit Value : 20
Academic Year 2023-24

The United Kingdom Tax System: An Overview with a Focus on Capital Gains Tax, Inheritance Tax, and Corporation Tax
Introduction
The United Kingdom (UK) tax system is a complex network of taxes and regulations that govern the collection of revenue from individuals and businesses. This essay provides an overview of the UK tax system, with a specific focus on capital gains tax (CGT) for individuals, inheritance tax, and corporation tax. It also discusses relevant reliefs and exemptions that can be utilized to minimize tax liabilities.
Overview of the UK Tax System
The UK tax system is administered by Her Majesty’s Revenue and Customs (HMRC) and consists of various direct and indirect taxes. The main direct taxes include income tax, national insurance contributions, capital gains tax, inheritance tax, and corporation tax (Melville, 2022). Indirect taxes include value-added tax (VAT), excise duties, and stamp duty land tax.
Income tax is a progressive tax levied on an individual’s income, with higher earners paying a larger proportion of their income in tax. National insurance contributions are paid by employees, employers, and the self-employed to fund various state benefits (Kaplan, 2022a). Value-added tax is a consumption tax applied to most goods and services, with a standard rate of 20% as of 2023 (HMRC, 2023).
Capital Gains Tax for Individuals
Capital gains tax is a tax on the profit realized upon the sale or disposal of an asset that has increased in value. For individuals, CGT applies to the sale of assets such as property, shares, and other investments (Melville, 2022). The tax is calculated based on the difference between the sale price and the original purchase price, taking into account any improvements made to the asset.
Several reliefs and exemptions are available to minimize CGT liabilities for individuals. The primary residence relief, also known as private residence relief, exempts gains made on the sale of an individual’s main home from CGT (Kaplan, 2022b). Entrepreneurs’ relief reduces the CGT rate to 10% on qualifying business assets, subject to a lifetime limit of £1 million (Gov.uk, 2023a).
Inheritance Tax
Inheritance tax is a tax on the estate (property, money, and possessions) of a deceased person. It is payable when the value of the estate exceeds the nil-rate band, which is currently £325,000 (Gov.uk, 2023b). The standard inheritance tax rate is 40%, but this can be reduced to 36% if at least 10% of the estate is left to charity.
Several exemptions and reliefs are available to reduce inheritance tax liabilities. These include the spouse or civil partner exemption, which allows assets to be passed tax-free to a surviving spouse or civil partner, and the annual exemption, which allows individuals to give away up to £3,000 per year without incurring inheritance tax (Kaplan, 2022a).
Corporation Tax
Corporation tax is a tax on the profits made by companies operating in the UK. The current corporation tax rate is 19%, but this is set to increase to 25% from April 2023 for companies with profits over £250,000 (Gov.uk, 2023c). Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief.
Companies can benefit from various reliefs and exemptions to reduce their corporation tax liabilities. The research and development (R&D) relief allows companies to deduct an extra 130% of their qualifying R&D costs from their yearly profit, in addition to the normal 100% deduction (HMRC, 2023). The patent box regime reduces the corporation tax rate to 10% on profits attributable to qualifying patents (Gov.uk, 2023d).
Conclusion
The UK tax system is a complex framework that encompasses various taxes, reliefs, and exemptions. Understanding the intricacies of capital gains tax, inheritance tax, and corporation tax is essential for individuals and businesses seeking to minimize their tax liabilities. By utilizing appropriate reliefs and exemptions, taxpayers can ensure compliance with the tax system while optimizing their financial position.
References:
Gov.uk. (2023a). Entrepreneurs’ Relief. https://www.gov.uk/business-asset-disposal-relief
Gov.uk. (2023b). Inheritance Tax. https://www.gov.uk/inheritance-tax
Gov.uk. (2023c). Corporation Tax. https://www.gov.uk/corporation-tax
Gov.uk. (2023d). Corporation Tax: Patent Box. https://www.gov.uk/guidance/corporation-tax-patent-box
HMRC. (2023). VAT rates. https://www.gov.uk/vat-rates
Kaplan. (2022a). Taxation (UK) – ACCA Study Text. Kaplan Publishing.
Kaplan. (2022b). Taxation (UK) – ACCA Exam Kit. Kaplan Publishing.
Melville, A. (2022). Finance Act 2022. Pearson.
 
Table of contents
1 Key team contact details 3
2 Module content 3
3 Learning materials 5
4 Maintaining Academic Honesty and Integrity 5
5 Meeting Deadlines 5
6 Getting Support 5
7 Preparing for your Assessment 6
8 Summative Assessments 6
Summative Assessment 1 6
Summative Assessment 2 10
9 Glossary and Acronyms 11
 
1 Key team contact details
Module Leader Ms. Bingxiu Li
Email 309441961@qq.com

External Examiner TBC
Academic Partner Link Tutor (APLT) Dr. Randall. McFadden
2 Module content
This module aims to build upon the knowledge and skills gained in the L5 Taxation module
and develop knowledge and skills relating to the tax system as applicable to individuals, single
companies, and groups of companies.
Topics covered:
1. Chargeable gains for individuals
• The scope of the taxation of capital gains
• The basic principles of computing gains and losses
• Gains and losses on the disposal of movable and immovable property
• Gains and losses on the disposal of shares and securities
• The computation of capital gains tax
• The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets
2. Inheritance tax
• The basic principles of computing transfers of value
• The liabilities arising on chargeable lifetime transfers and on the death of an individual
• The use of exemptions in deferring and minimising inheritance tax liabilities
• Payment of inheritance tax
3. Corporation tax
• The scope of corporation tax
• Taxable total profits
• Chargeable gains for companies
• The calculation of corporation tax liability
• The effect of a group corporate structure for corporation tax purposes
• The use of exemptions and reliefs in deferring and minimising corporation tax liabilities

Expectations 

Specific expectations students can have of tutors: 
1. Guidance and support
Your tutor will provide you with academic guidance and will help you reflect on your academic progress so that you get the most out of your studies. Your tutor and student support team will also provide advice on the wider network of specialist student support services at the University to help you have the best possible experience during your studies.

2. Confidentiality
Some information may be sensitive. Although it may be necessary to consult colleagues, University staff will treat such information as confidential and will limit disclosures to the minimum necessary.

3. Assessment marks and summative feedback
Assessment marks and summative feedback will be given within 3 working weeks from the assessment submission deadline.

Specific expectations tutors will have of students: 
1. Engagement
You are expected to attend all the classes and seminars and be punctual. You will get the most out of your support by working in partnership with your tutor and student support team. This is a two-way process and by taking part in it fully you will gain more benefits from your experience at the University. You are therefore, expected to actively participate and engage in class activities and inform the tutor by e-mail when and if you are unable to attend any classes.

2. Preparation
You are expected to read any preparation material / attempt any practice questions prior to lectures/seminars as per instructions given.

3. Professional conduct
You are expected to behave professionally in classes and not cause any disruption that might affect other students’ learning. You are also expected to communicate with your tutors in a professional manner.

4. Attempt all assessments
You are expected to attempt all assessments by the submission deadline unless there are extenuating circumstances (in which case please contact your Course Leader for extension request or mitigation claim prior to the assessment deadline). 
3 Learning materials
The reading list for this module is available on Blackboard in the module area and online by searching readinglists. This shows real-time availability of books in the library and provides direct links to digital items, recommended by your lecturer.
Remember to log into Blackboard daily to receive all the latest news and support available at your module sites!
Subject guides (libraryguides) are also available to help you find relevant information for assignments, with contact details of the Subject Librarian for your School.
Essential Reading:
• Melville, A., 2022. Finance Act 2022. Harlow: Pearson
• Kaplan, 2022. Taxation (UK) – ACCA Study Text. Berkshire: Kaplan Publishing
Recommended Reading:
• Kaplan, 2022. Taxation (UK) – ACCA Exam Kit. Berkshire: Kaplan Publishing
4 Maintaining Academic Honesty and Integrity
Academic Integrity means avoiding plagiarism and cheating and owning your own work, the use of essay mills and AI content is also considered academic misconduct. This is when you submit a piece of work which is not completely your own, but which you are presenting as your own without acknowledging the author or properly referencing the original source. All your work must demonstrate Academic Integrity; it must be an honest and fair submission, complying with all the requirements of the assessment. Failure to meet these standards of behaviour and practice is academic misconduct, which can result in penalties being applied under the Academic Offences Regulations. You can get support with your academic writing by speaking to our Admin. team.
5 Meeting Deadlines
You should always try your best to submit your work on time. You can submit coursework up to 10 calendar days late without penalty if you request an extension before the submission deadline. Without an extension, the maximum mark you will be able to get for that work will be the pass mark.
6 Getting Support
There may be times when you experience circumstances outside of your control and talking to your Module Leader and other support services available to you in the university will help keep you on track with your studies. You can access information on support services and further guidance at our official website https://www.hutb.edu.cn/p222/index.html.
If your circumstances mean that you are not able to submit at all or are unable to attend an in-person assessment like an exam or in-class test, then you can request mitigation for the assessment. Approved mitigation means that you can have another attempt without penalty if you fail an assessment or do not submit.
If you request an extension or mitigation before the deadline you can choose to self-certify, without providing evidence, so long as you have a valid reason. You can only self-certify three assessments per academic year. If you have used all your self-certification opportunities, or requested mitigation after the deadline, you will need to provide evidence of your exceptional circumstances for your request to be granted.
Your Admin. Team. will be able to support you through the process.
7 Preparing for your Assessment
A key part of your learning will be preparation for your summative assessment. You will be provided feedback on your formative assessments, and this will help you to better understand what is required of you when you submit your summative assessment. Please see below guidance on your formative assessment and how to access your feedback.
Assessment Support

Assessment (insert below type of assessment as per the table above)  Teaching Weeks in which Assessment Support Takes Place (enter each week no. in a new row)  Outline of Type and Form of Assessment Support to be Provided   Student Preparation Required Prior to or After the Support Session  How will the Support Session to be Delivered 
  A1 4-6 In class Q&A Preparation of data for analysis and questions to bring to class  During Seminars
  A2

13-14 Mock and Revision sessions Attempting past questions During lectures and seminars

8 Summative Assessments
Summative Assessment 1
Assessment title A1
Submission date and time 22nd March 2024
Word Count (or equivalent) 1,500 words
Where to submit Blackboard
Feedback date 12th April 2024
Assessment Weighting 40%
PSRB requirements (if applicable) 35% threshold
Submitting, feedback & grades online using Blackboard
Main objectives of the Assessment
This assignment is to examine the student’s knowledge on the UK tax systems and apply the knowledge of Capital Gains Tax on an Individual.
No. Learning Outcome Marking Criteria
LO1
Demonstrate systematic and comprehensive knowledge of the UK tax system backed by research
See below

LO2
Compute and critically explain the chargeable gains arising on individuals
See below

Mark
Awarded 70-100% 60-69% 50-59%
40- 49% Less than 40%
Task Analysis
Highest quality task coverage Good Standard of task coverage Competent task coverage Basic task coverage Inadequate, incompetent task coverage or understanding

Academic Standard
Excellent use of concepts Well-developed analysis Adequate use of concepts
Basic use of concepts Inadequate quality of analysis, or limited use of models

Data and
Referencing (as applicable)
Highest quality data and referencing Use of relevant data, comprehensive referencing of sources Limited use of data sources, limited referencing Basic use of data sources or referencing Inadequate or irrelevant data, poor referencing
Presentation
Excellent presentation Good quality of presentation Adequate presentation only Basic Presentation Poorly structured presentation

Assignment Brief.
Question 1.
Scenario:
On 01 May 1995 Alex James bought a house in Scotland for £55,000 and paid 2% stamp duty plus legal fees of £460 in addition to the purchase price. He lived in the house up until 31 April 2000 when he moved to Manchester for work until 31 Dec 2008 when he returned. During this period, he let the house to a tenant. He moved back to the house with the tenant and lived in his house until 01 Jan 2010 when he went abroad to take up employment. He returned to the UK on 30 Mar 2015 and was living with his girlfriend in Manchester until 31 Dec 2017 when he moved back to his house with the tenant still living in the house.
Alex James lived in the house until 01 April 2018 and sold the house on 01 Nov 2022 for 332,000 incurring 2% agent fees.
During the period he owned the house he spent the following amounts on the house.
2000 New Windows £4,500
2004 Driveway £6,800
2009 New bathroom £3,200
2010 Rear extension £64,000
2016 Repair a damage to the bathroom and windows £6,000
2019 New Roof £4,500

Required:
1. Give a brief overview of the UK tax system. (10 Marks)
2. Calculate the gain/loss arising for 2022/23 before any applicable reliefs. (20 Marks)
3. Calculate the taxable gain or loss for 2022/23 after application of applicable reliefs including letting relief (20 Marks)
(Note: treat enhancement expenditure as shared proportionally between both disposals and round off calculations for Principal Private Residence Relief and/or Letting relief to the nearest month.

Question 2.
Capital Gains Tax (CGT) is a tax levied on gains made on the disposal of chargeable assets by chargeable persons. There are available reliefs that could be used to reduce or defer the tax liabilities. Discuss any 4 reliefs with examples. (40 marks)

Presentation and referencing. (10 marks)
Total Marks Allocated to Assignment 1 (A1) – 100%

Assignment Guidance Notes
Your assignment should be no longer than 1500 words in total.
Submission Criteria:
• The report should be in MS Word.
• Satisfactorily proofread prior to submission, and therefore the work must not contain significant errors of spelling and grammar.
• Ensure that font style to be Arial or Times New Roman and font size should be 12 for body text. Font size of headings and subheadings should be consistent.

Employability Skills
This assessment covers the following employability skills, which you could demonstrate on your CV and at job interviews if you successfully pass the assessment:
• Communication
• Writing
• Non-Verbal
• Problem solving
• Take initiative and self-motivating
• Critical thinking
• Can work under pressure and to deadline
• Planning and organisation skills
• Ability to learn and adapt
• Valuing Diversity
• Time management
• Flexibility
• Interpersonal
• Confidence
• Decision making

Summative Assessment 2
Assessment title A2
Submission date and time TBC
Word Count (or equivalent) N/A
Where to submit Written Examination
Feedback date 15 working days after Examination
Assessment Weighting 60%
PSRB requirements (if applicable) 35% threshold
Submitting, feedback & grades online using Blackboard
Main objectives of the Assessment
This assessment will examine the student’s knowledge on Capital Gains Tax, Inheritance Tax and Corporation Tax.
No. Learning Outcome Marking Criteria
LO1
Demonstrate systematic and comprehensive knowledge of the UK tax system backed by research
N/A

LO2
Compute and critically explain the chargeable gains arising on individuals N/A

LO3
Compute and critically explain the inheritance tax liabilities of individuals N/A

LO4
Compute and critically explain the corporation tax liabilities of individual companies and groups of companies N/A

LO5
Demonstrate professional ability in providing written advice on technical matters to a lay person N/A

Assessment Brief
There will be a 2 hour 10 minutes written examination which will be scheduled around Weeks 15/16. This will be in 2 parts. 10 Multiple choice questions and 2 questions in part 2.
Section A – 10 MCQs 30 marks
Section B – Question 11 40 marks
Question 12 30 marks
Employability Skills
This assessment covers the following employability skills, which you could demonstrate on your CV and at job interviews if you successfully pass the assessment

• Communication
• Writing
• Problem solving
• Critical thinking
• Can work under pressure and to deadline
• Planning and organisation skills
• Creativity/lateral thinking
• Time management
• Flexibility
• Confidence
• Decision making

9 Glossary and Acronyms
Terms and definitions

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Study Notes & Homework Samples: PHIL200 the history of the denomination/sect, the beliefs, the major scripture eg Buddhism »Module 3 Assignment: Financial Risk and Required Return