(ii) Write a letter to Donald advising him on the most tax efficient manner in which he can relieve the loss
incurred in the year to 31 March 2007. Your letter should briefly outline the types of loss relief available
and explain their relative merits in Donald’s situation. Assume that Donald will have no source of income
other than the business in the year of assessment 2006/07 and that any income he earned on a parttime
basis while at university was always less than his annual personal allowance. (9 marks)
Assume that the corporation tax rates and allowances for the financial year 2004 and the income tax rates
and allowances for 2004/05 apply throughout this question.
Relevant retail price index figures are:
January 1998 159·5
April 1998 162·6
(ii) [Donald’s address] [Firm’s address]
Dear Donald [Date]
I understand that you have incurred a tax loss in your first year of trading. The following options are available in respect
of this loss.
1. The first option is to use the trading loss against other forms of income in the same year. If such a claim is made,
losses are offset against income before personal allowances.
Any excess loss can still be offset against capital gains of the year. However, any offset against capital gains is
before both taper relief and annual exemptions.
第1题：
(b) Explain by reference to Hira Ltd’s loss position why it may be beneficial for it not to claim any capital
allowances for the year ending 31 March 2007. Support your explanation with relevant calculations.
(6 marks)
第2题：
Part A
Directions:
You heard that one of your friends has been accepted by a foreign university. Write a letter of congratulations including (1) your congratulations; (2) some advice; (3) reminding him to keep in touch with you. You should write about 100 words. Do not sign your own name at the end of the letter. Use "Li Ming" instead. You do not need to write the address.
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Dear Sun Xiang,
I was delighted to hear that you have been accepted by Oxford University. I would like to extend my warmest congratulations to you.
It will be a new life for you. I admire you so much. Life abroad is very different, so you should try to accustom yourself to it as soon as possible. I believe that you will achieve a lot in your future study.
When you get there, write to me and let me know about your life there. We should not be separated by distance, should we?
Yours truly,
Li Ming
第3题：
Part A
51. Directions:
Restrictions on the use of plastic bags have not been so successful in some regions. “White pollution ”is still going on. Write a letter to the editor(s) of your local newspaper to
1) give your opinions briefly and
2) make two or three suggestions
You should write about 100 words. Do not sign your own name at the end of the letter. Use "Li Ming" instead. You do not need to write the address.
51：在某些地区塑料袋的禁止使用并不是很成功，因此白色污染仍然继续
给当地报纸的编辑写一封信，信内包括
1 给出自己简短的看法和观点
2 给出2-3条建议
【范文】
Dear Editors,
I, as your faithful reader, am writing this letter to suggest that plastic bags should be restricted in our daily life. However, to my surprise and sadness, I have found that disposable plastic bags are still widely used in some areas just because people are unwilling to change their old habits, thus causing their surroundings to be even worse.
To solve this serious problem, I would like to put forward a couple of practical suggestions. Above all, our country should establish a strong agency to limit the production of those bags and monitor the use of them. Furthermore, some other choices should be adovcated to replace plastic bags with paper or bamboo ones. Finally, consumers should pay for the use of plastic bags so as to enhance their consciousness of environmental protection.
I really hope my suggestions would attract your due attention and receive an early reply.
Yours Sincerely,
Li Ming
第4题：
Directions:
Restrictions on the use of plastic bags have not been so successful in some regions. “White pollution ”is still going on. Write a letter to the editor(s) of your local newspaper to
1)give your opinions briefly and,
2) make two or three suggestions
You should write about 100 words. Do not sign your own name at the end of the letter. Use "Li Ming" instead. You do not need to write the address.(10 points)
AMPLE：
Dear Editor(s),
I am writing this letter to draw your attention on “plastic pollution”. Though regulations that ban the free usage of plastic shopping bags have been put into effect，what is happening in some areas is less-than-satisfactory.
How to solve this problem effectively has become a hot issue among many people in recent years. As for me, I would like to make several suggestions. On the one hand, the governments should set up rules and regulations to control the productivity and circulation of the plastic bags. On the other hand, people should realize the significance of protecting our environment and not use too many plastic bags.
I would be greatly appreciated if you take my suggestions into consideration. And I sincerely hope that your Newspaper could help to solve the problem.
Yours faithfully,
Li Ming
第5题：
Part A
51.Directions:
Your friend Steven and Jenny have just had a new baby boy. Please write a letter to congratulate them. You should write about 100 words on ANSWER SHEET II. Do not sign your own name at the end of the letter. You do not need to write the address. ( 10 points )
第6题：
(b) Explain the advantages from a tax point of view of operating the new business as a partnership rather than
as a company whilst it is making losses. You should calculate the tax adjusted trading loss for the year
ending 31 March 2008 for both situations and indicate the years in which the loss relief will be obtained.
You are not required to prepare any other supporting calculations. (10 marks)
(b) The new business
There are two tax advantages to operating the business as a partnership.
(i) Reduction in taxable income
If the new business is operated as a company, Cindy and Arthur would both be taxed at 40% on their salaries. In
addition, employer and employee national insurance contributions would be due on ￡105 (￡5,000 – ￡4,895) in respect
of each of them.
If the new business is operated as a partnership, the partners would have no taxable trading income because the
partnership has made a loss; any salaries paid to the partners would be appropriations of the profit or loss of the
business and not employment income. They would, however, each have to pay Class 2 national insurance contributions
of ￡2·10 each per week.
(ii) Earlier relief for trading losses
If the new business is operated as a company, its tax adjusted trading loss in the year ending 31 March 2008 would
be as follows:
第7题：
Part A
51. Directions:
You have just received a letter from a company, which replied your application for a job and asked you to go to the interview on August 30. Please write a reply which is about 100 words on ANSWER SHEET II. Do not sign your own name at the end of the letter. You do not need to write the address. ( 10 points)
第8题：
(b) Donald actually decided to operate as a sole trader. The first year’s results of his business were not as he had
hoped, and he made a trading loss of ￡8,000 in the year to 31 March 2007. However, trading is now improving,
and Donald has sufficient orders to ensure that the business will make profits of at least ￡30,000 in the year to
31 March 2008.
In order to raise funds to support his business over the last 15 months, Donald has sold a painting which was
given to him on the death of his grandmother in January 1998. The probate value of the painting was ￡3,200,
and Donald sold it for ￡8,084 (after deduction of 6% commission costs) in November 2006.
He also sold other assets in the year of assessment 2006/07, realising further chargeable gains of ￡8,775 (after
indexation of ￡249 and taper relief of ￡975).
Required:
(i) Calculate the chargeable gain on the disposal of the painting in November 2006. (4 marks)
第9题：
Part A
51. Directions:
You are preparing to ask for some help from your teacher, write a letter that:
1) detail what you want him or she does for you,
2) express your thanks to your teacher,
You should write about i00 words on ANSWER SHEET II. Do not sign your own name at the end of the letter. You do not need to write the address.
第10题：