(b) Advise Sergio on the appropriateness of investing in a domestic rental property in view of his personalcircumstances and recommend suitable alternative investments giving reasons for your advice. (4 marks)

第1题：

(ii) State, giving reasons, the tax reliefs in relation to inheritance tax (IHT) and capital gains tax (CGT) which

would be available to Alasdair if he acquires the warehouse and leases it to Gallus & Co, rather than to

an unconnected tenant. (4 marks)

正确答案：
(ii) Apart from the fact that Alasdair can keep an eye on his tenant, the main advantages are twofold:
IHT: If the firm are the tenants, the property will be land and buildings used in a business carried on by a partnership
in which the donor is a partner. Thus, Alasdair will be able to claim business property relief (BPR) at a rate of 50%
so long as he remains a partner in the firm. However, this relief would not be available until Alasdair has owned
the property for at least two years from his firm taking up the tenancy.
CGT: As Alasdair is a partner in the firm using the building, it will also be a qualifying asset for the purposes of rollover
relief on any gains arising from the disposal of the property. Assuming that Alasdair acquires a replacement asset
which will be used in the trade, the gain on sale can be deferred against the tax base cost of the replacement asset.
In the event that rollover relief cannot be used, any gains on disposal will be subject to business asset taper relief.

第2题：

(b) Mabel has two objectives when making the gifts to Bruce and Padma:

(1) To pay no tax on any gift in her lifetime; and

(2) To reduce the eventual liability to inheritance tax on her death.

Advise Mabel which item to gift to Bruce and to Padma in order to satisfy her objectives. Give reasons for

your advice.

Your advice should include a computation of the inheritance tax saved as a result of the two gifts, on the

assumption that Mabel dies on 30 June 2011. (10 marks)

正确答案：

第3题：

(ii) Following on from your answer to (i), evaluate the two purchase proposals, and advise Bill and Ben

which course of action will result in the highest amount of after tax cash being received by the

shareholders if the disposal takes place on 31 March 2006. (4 marks)

正确答案：

第4题：

(ii) Advise Clifford of the capital gains tax implications of the alternative of selling the Oxford house and

garden by means of two separate disposals as proposed. Calculations are not required for this part of

the question. (3 marks)

正确答案：
(ii) The implications of selling the Oxford house and garden in two separate disposals
The additional sales proceeds would result in an increase in Clifford’s capital gains and consequently his tax liability.
When computing the gain on the sale of the house together with a small part of the garden, the allowable cost would
be a proportion of the original cost. That proportion would be A/A + B where A is the value of the house and garden
that has been sold and B is the value of the part of the garden that has been retained. Principal private residence relief
and taper relief would be available in the same way as that set out in (i) above.
When computing the gain on the sale of the remainder of the garden, the cost would be the original cost of the property
less the amount used in computing the gain on the earlier disposal. Principal private residence relief would not be
available as the land sold is not a dwelling house or part of one.

第5题：

(c) The inheritance tax payable by Adam in respect of the gift from his aunt. (4 marks)

Additional marks will be awarded for the appropriateness of the format and presentation of the memorandum and

the effectiveness with which the information is communicated. (2 marks)

Note: you should assume that the tax rates and allowances for the tax year 2006/07 will continue to apply for the

foreseeable future.

正确答案：
(c) Inheritance tax payable by Adam
The gift by AS’s aunt was a potentially exempt transfer. No tax will be due if she lives until 1 June 2014 (seven years after
the date of the gift).
The maximum possible liability, on the assumption that there are no annual exemptions or nil band available, is ￡35,216
(￡88,040 x 40%). This will only arise if AS’s aunt dies before 1 June 2010.
The maximum liability will be reduced by taper relief of 20% for every full year after 31 May 2010 for which AS’s aunt lives.
The liability will also be reduced if the chargeable transfers made by the aunt in the seven years prior to 1 June 2007 are
less than ￡285,000 or if the annual exemption for 2006/07 and/or 2007/08 is/are available.

第6题：

(b) State, with reasons, the principal additional information that should be made available for your review of

Robson Construction Co. (8 marks)

正确答案：
(b) Principal additional information
■ Any service contracts with the directors or other members of the management team (e.g. the quantity surveyor). These
may contain ‘exit’ or other settlement terms in the event that their services are no longer required after a takeover/buyout.
■ Prior period financial statements (to 30 June 2005) disclosing significant accounting policies and the key assumptions
concerning the future (and other key sources of estimation uncertainty) that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities in the year to 30 June 2006.
For example, concerning:
– the outcome on the Sarwar dispute;
– estimates for guarantees/claims for rectification;
– assumptions made in estimating costs to completion (e.g. for increases in costs of materials or labour).
Tutorial note: Under IAS 1 ‘Presentation of Financial Statements’ the judgements made by management that have the
most significant effect on amounts recognised in financial statements (other than those involving estimations) should
also be disclosed.
■ The most recent management accounts and cash flow forecasts to assess the quality of management information being
used for decision-making and control. In particular, in providing Robson with the means of keeping its cash flows within
its overdraft limit.
Tutorial note: Note that Prescott has substantial cash resources. Therefore Robson’s lack of finance might be a reason
why its management are interested in selling the business.
■ A copy of the signed bank agreement for the overdraft facility (and any other agreements with finance providers). Any
breaches in debt covenants might result in penalties of contingent liabilities that Prescott would have to bear if it acquired
Robson.
■ The standard terms of contracts with customers for construction works. In particular, for:
– guarantees given (e.g. for rectification under warranty);
– penalty clauses (e.g. in the event of overruns or non-completion);
– disclaimers (including conditions for invoking force majeure).
Prescott will want to make some allowance for settlement of liabilities arising on contracts already completed/in-progress
when offering a price for Robson.
Tutorial note: A takeover might excuse Robson from fulfilling a contract.
■ Legal/correspondence files dealing with matters such as the claims of the residents of the housing development and
Robson’s claim against Sarwar Services Co. Also, fee notes rendered by Robson’s legal advisers showing the costs
incurred on matters referred to them.
■ Robson’s insurer’s ‘cover note’ to determine Robson’s exposure to claims for rectification work, damages, injuries to
employees, etc.
■ The quantity surveyor’s working papers for the last quarterly count (presumably at 31 March 2006) and the latest
available rolling budgets. Particular attention should be given to loss-making contracts and contracts that have not been
started. (Prescott might seek to settle rather than fulfil them.) The pattern of taking profits on contracts will be of
interest, for example, to determine the accuracy of the quantity surveyor’s estimates.
Tutorial note: A regular pattern of taking too much profit too soon might be due to underestimating costs to completion
or be evidence of cost overruns due to rectification.
■ Type and frequency of constructions undertaken. Prescott is interested in the building and refurbishment of hotels and
leisure facilities. Robson’s experience in this area may not be extensive.
■ Non-current asset register showing location of plant and equipment so that some test checking on physical existence
might be undertaken (if an agreed-upon-procedure).

第7题：

(b) Given his recent diagnosis, advise Stuart as to which of the two proposed investments (Omikron plc/Omega

plc) would be the more tax efficient alternative. Give reasons for your choice. (3 marks)

正确答案：
(b) Both companies are listed. The only difference will be in the availability of inheritance tax relief – specifically business property
relief (BPR). If Stuart and Rebecca jointly hold in excess of 50% of the share capital of a listed company, BPR will apply at
the rate of 50%. Otherwise, no BPR is available.
Stuart can only buy 1,005,000 (￡422,100/￡0·42) shares in Omikron plc. This represents a shareholding of 2·00%
(1,005,000/50,250,000). As the shares in Omikron plc are listed, a 2% holding will not qualify for BPR.
At the moment, both Stuart and Rebecca own 2,400,000 shares in Omega plc. Their shareholdings are amalgamated for
IHT purposes under the related property rules. With a joint holding of 48%, BPR is not available. A further 200,001 shares
will be required to attain a 50% holding. Assuming Stuart and Rebecca can buy these shares, they must then hold their 50%
interest in the company for the period of at least two years in order to ensure that BPR applies.
On the basis that Stuart is expected to survive for two to three years, he should therefore buy further shares in Omega plc in
order to take advantage of the BPR available.

第8题：

问答题

Some people say that the best preparation for life is learning to be cooperative. Others take the opposite view and say that learning to be competitive is the best preparation. Write a composition of about 400 words on the following topic，expressing your views on cooperation and competition. COOPERATION OR COMPETITION　　In the first part of your writing you should present your thesis statement, and in the second part you should support the thesis statement with appropriate details. In the last part you should bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the above instructions may result in a loss of marks.

正确答案：
COOPERATION OR COMPETITION It is difficult to figure out whether cooperation or competition is more important. Although cooperation is widely emphasized in the world, competition, I believe, still plays an essential part in people's lives. Learning to be competitive is clearly the best preparation for life. This becomes very clear as one has more experience in the world. Everyone is out to make their own lives better. If you are not competitive, you may lose many chances and be left behind.
In the first place, everyone knows that Man is by nature a competitive, aggressive, and selfish animal. This is why Man can dominant the world, even though Man is not the strongest species. Darwin, in The Origin of the Species, makes it very clear that the weak will die, and only the strong will survive. Since this is our fate, the only intelligent thing to do is to be strong, and be a winner.
Competition exists in almost every field. In the business world, for instance, everyone knows that the most important order of the day is to beat your competitors. This can only be done by competing with any and all means necessary to win. If your product is not competitive, you can not obtain the trust of customers. No one wants to go out of business, so you must compete. Also in your workplace, you must be better than the other employees you are working with, because in this age of downsizing you do not want to be fired. Likewise, in the sports world, the strongest will come out as winners. They become our heroes and they are glorified in every way. In fact, the only way our world rewards people is to give trophies to the winners, not to the losers. Only the winner will be remembered. Everyone wants glory in life and learning to be competitive is the only path to glory.
Therefore, the only way to survive in this world is to be competitive. To learn to cooperate is a ridiculous way to live one' s life. In fact, I know that when I wish to beat someone who is weaker willed than, I would use his foolish cooperative actions against him in the end.

解析：
竞争与合作一直是写作考试热衷的话题。本文立场鲜明，论证有力。作者从人的本性、商界及体育界现实出发，说明只有竞争才能在当今世界生存。虽然对许多中国学生来说本文的观点会有些偏激，但从西式思维出发，本文可算一篇佳作。

第9题：

问答题

Although more and more students are enrolled in university every year, there are also more and more students who fail in their studies and drop out of school. This has caused much concern in the society, and a local newspaper is inviting contributions from university students to discuss the reasons. Write a composition as a contribution to this newspaper to voice your opinion. Remember to supply a title for your own article.　　In the first part of your writing you should present your thesis statement, and in the second part you should support the thesis statement, with appropriate details. In the last part you should bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the above instructions may result in a toss of marks.

正确答案：
Why Students Fail in Universities Traditionally Chinese believed that university education was the guarantee of a happy life, so every fall we can find many freshmen happily and hopefully enter the campus. But what is unknown is that many students fail in their tests and have to take make-up exams or even drop out. To solve the problem, we have to find the reasons. In my opinion, there are mainly three reasons to account for this tragedy.
Most students' failures can be attributed to their poor study ability due to problems in high school. High school should prepare students for university education, but currently it is doing everything but that. High school education is known to be test oriented, for students are engaged in memorizing texts and working at sample test papers. Because of this, students admitted to university come to school only with mechanical study habits, which cannot help students cope with university study. For example, many students in my class may be good in courses that rely on memory, but in courses that require personal judgment or group activity, they will invariably fail.
Even with good study ability, some students may still fail because of the negative influence from their families. The first kind of such influence is lack of money. Now most universities collect quite high tuition from students, so students from poor families are constantly worried by money problem. Another influence is family misfortune, the most common examples of which are illness and accident. If students are troubled by family problem, they won't be able to focus their mind on study, and naturally they will not survive in university.
There are also a small number of students who fail because of personal weakness. Some students have trouble in sustaining positive relationship with their classmates, and bad relation prevents them from enjoying university study. Some other students cannot resist various temptations in their life, such as movies, TV programs, computer games, and campus romance, and these may also prevent them from studying well.
From what are said above, we can conclude that different students fail for different reasons. Some fail because they lack proper study methods, some fail because they are distracted by family issues, and still some other students fail because they suffer from shortcomings in their personality. Therefore if we want to prevent academic failures, we should first identify the reasons why they are experiencing trouble in their study, and then help them in the most effective way. It can be hoped that we will all pull through the four years in university and make our dreams and happiness come true.

解析：
本题要回答的问题是why do some university students drop out of school，属于因果关系题。例文先后列举了三个原因：不良的学习方法、家庭问题以及个人问题。关于每一种原因作者都做了一定阐述，除了逻辑推理外，还用了很多的例子。例文引言段采用了对比的方式开始，作者先说大学新生入学的欣喜，然后引出学生的失败。Thesis statement中的表达非常明确清晰。在正文段中，作者按照涉及学生数量多少为顺序列出三个原因，确保了内容的通顺。在结论段中，作者使用了两句话充分总结了自己的观点，然后用提出解决方法的方式写出了最终评论。

第10题：

问答题

Test 9　　According to a report released by the Ministry of Education recently, Chinese students’ ability to hand-write Chinese characters is on the decline and due attention is needed to change such a trend.　　Write a composition of about 200 words on the following topic:The Importance of Hand-Writing　　You are to write in three parts.　　In the first part, state specifically what your view is.　　In the second part, support your view with one or two reasons.　　In the last part, bring what you have written to a natural conclusion or make a summary.　　Marks will be awarded for content, organization, language and appropriateness. Failure to follow the instructions may result in a loss of marks.

正确答案：
【参考范文】
The Importance of Hand-Writing Our impression that students’ hand-writing skills are on the decline is echoed and confirmed by a report from the Ministry of Education. Not only are the students less appreciative to the beautiful hand-writing, the possibilities of them unable to write some Chinese characters are on the increase, and wrong body gestures are also among the problems detected.
The increasing use of computer in our lives is obviously the biggest contributor to this problem. When teachers hand out assignments and collect papers through e-mail, and when the teaching materials are presented and copied in electronic form, how can we expect the students to improve their hand-writing? What’s making the situation worse is the fact that the educators are busily engaged in all sorts of daily routines that modern life requires. And we can not neglect the negative effect of a higher student-teacher ratio, especially in universities. And it is practically impossible for teachers to pay attention to, not to mention doing something about, the hand-writing of the students.
The solution to the problem lies in the combined efforts of students, teachers and schools. Students need to understand the importance of hand-writing while teachers need to inform, to emphasize and to guide the students. And regulations and rules about enhancing the students’ hand-writing should be made and practiced by schools.

解析：暂无解析

第11题：

问答题

Test 12　　Friendship is forever a topic for human beings. How do you view “friendship”?　　Write on ANSWER SHEET TWO a composition of about 200 words on the following topic:FRIENDSHIP　　You are to write in three parts.　　In the first part, state specifically what your idea is.　　In the second part, provide one or two reasons to support your idea OR describe your idea.　　In the last part, bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the instructions may result in a loss of marks.

正确答案：
【参考范文】
Friends are indispensable in our daily life. When we feel happy, we can share the pleasure with them; when we feel gloomy, friends will comfort us; when we have some secrets, we just want to share them with friends; and when we have difficulties, friends are always ready to help us.
Life is a bouquet, friendship is flower. We cannot live without friendship just as we cannot survive without air or water. Friendship gives us a feeling of security and warmth; friendship encourages us to go ahead when we encounter difficulty.
Building friendship takes time. True friendship requires equality and loyalty. It is an in-depth relationship combining trust, support, understanding, empathy and intimacy. True friendship should be able to stand all kinds of tests. Just as an old saying goes, “A friend in need is a friend indeed.”
In conclusion, we must treasure our friends and friendship. A good friend can be a good companion in our lives. The more friends we have, the more help we can get from them and the more pleasure we can share with them. If we have true friends, we will feel happy in the world.

解析：暂无解析

第12题：

问答题

With the rapid development of world economy, energy problem has become a heated issue confronted by many nations. Many people are worrying that one day all the energy would run out and nothing but waste is left to future generations. Write a composition of about 400 words with the following title, giving your suggestions on the solutions of energy problem.HOW TO SOLVE THE ENERGY PROBLEMIn the first part of your writing you should present your thesis statement, and in the second part you should support the thesis statement with appropriate details. In the last part you should bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the above instructions may result in a loss of marks.

正确答案：
HOW TO SOLVE THE ENERGY PROBLEM Energy is one of the biggest problems people are faced with today. Many people are afraid that the amount of our natural resources is very limited, and that if we use it at the present rate, the world is most likely to run out of oil, coal and metals, and to run short of food in the near future. Since this will lead to a serious energy crisis and thus threaten mankind's survival, it is urgent to take effective measures to solve this problem.
The majority of people respond to the problem with a clamor for more severe conservation of our natural resources. It is necessary because much of our energy in the form of oil, coal, iron, gas, electricity, food and the like has been wasted prodigally in the industrial and personal consumption. In some countries, this waste becomes habitual and traditional, to the extent that people are seldom aware of it in their daily life and prone to think of natural resources as inexhaustible. So it is argued that ff all people realize that wastefulness in dealing with these natural resources means that we will leave our descendents a devastated world, and if all people make serious efforts to practice conservation in using energy, the present drain on the limited and irreplaceable resources will certainly slow down.
But conservation alone is not all the answer. Another and perhaps the best way to solve the energy problem is to develop new sources of energy. It is obvious that even if we can save much energy by using it carefully, we probably cannot avoid using up certain natural resources in the future. However abundant the mineral wealth of the country may be, it does not reproduce itself. When the resources are gone, they are gone forever and are bound to be exhausted ultimately. Practicing conservation can only delay the energy crisis, but cannot solve it completely. In the long run, we must try to develop substitutes such as solar energy, nuclear energy and so on. We must find new supplies in unexplored areas such as new kinds of food in the ocean and new kinds of power on other planets.
Human beings are by nature optimistic. Faced with the approach of energy crisis, we certainly should live a new life based on conservation not waste and even practice a rational system ff necessary. But the best solution would be to spend our money and energy on developing new natural resources.

解析：
本文探讨了能源危机问题。作者开门见山提出论点：能源危机问题是我们急需解决的问题。第二段作者论述了一般人对这一问题的看法：保护自然资源。不过作者认为仅仅保护还不够，从而引出第三段：开发新资源。最后一段作者总结上文，提出解决能源危机需要保护与开发相结合。

第13题：

(c) Advise Alan on the proposed disposal of the shares in Mobile Ltd. Your answer should include calculations

of the potential capital gain, and explain any options available to Alan to reduce this tax liability. (7 marks)

正确答案：

However, an exemption from corporation tax exists for any gain arising when a trading company (or member of a trading
group) sells the whole or any part of a substantial shareholding in another trading company.
A substantial shareholding is one where the investing company holds 10% of the ordinary share capital and is beneficially
entitled to at least 10% of the
(i) profits available for distribution to equity holders and
(ii) assets of the company available for distribution to equity holders on a winding up.
In meeting the 10% test, shares owned by a chargeable gains group may be amalgamated. The 10% test must have been
met for a continuous 12 month period during the 2 years preceding the disposal.
The companies making the disposals must have been trading companies (or members of a trading group) throughout the
12 month period, as well as at the date of disposal. In addition, they must also be trading companies (or members of a trading
group) immediately after the disposal.
The exemption is given automatically, and acts to deny losses as well as eliminate gains.
While Alantech Ltd has owned its holding in Mobile Ltd for 33 months, its ownership of the Boron holding has only lasted
for 10 months (at 1 June 2005) since Boron was acquired on 1 July 2004. Selling the shares in June 2005 will fail the
12 month test, and the gain will become chargeable.
It would be better for the companies to wait for a further month until July 2005 before selling the amalgamated shareholding.
By doing so, they will both be able to take advantage of the substantial shareholdings relief, thereby saving tax of ￡29,625
assuming a corporation tax rate of 19%.

第14题：

(c) Outline the ways in which Arthur and Cindy can reduce their income tax liability by investing in unquoted

shares and recommend, with reasons, which form. of investment best suits their circumstances. You are not

required to discuss the qualifying conditions applicable to the investment vehicle recommended. (5 marks)

You should assume that the income tax rates and allowances for the tax year 2005/06 apply throughout this

question

正确答案：
(c) Reduction of income tax liability by investing in unquoted shares
The two forms of investment
Income tax relief is available for investments in venture capital trusts (VCTs) and enterprise investment scheme (EIS) shares.
A VCT is a quoted company that invests in shares in a number of unquoted trading companies. EIS shares are shares in
qualifying unquoted trading companies.
Recommendation
The most suitable investment for Arthur and Cindy is a VCT for the following reasons.
– An investment in a VCT is likely to be less risky than investing directly in EIS companies as the risk will be spread over
a greater number of companies.
– The tax deduction is 40% of the amount invested as opposed to 20% for EIS shares.
– Dividends from a VCT are not taxable whereas dividends on EIS shares are taxed in the normal way.

第15题：

(b) (i) Advise Andrew of the income tax (IT) and capital gains tax (CGT) reliefs available on his investment in

the ordinary share capital of Scalar Limited, together with any conditions which need to be satisfied.

Your answer should clearly identify any steps that should be taken by Andrew and the other investors

to obtain the maximum relief. (13 marks)

正确答案：
(b) (i) Andrew may be able to take advantage of tax reliefs under the enterprise investment scheme (EIS) provided the
necessary conditions are met. The conditions that have to be satisfied before full relief is available fall into three areas,
and broadly require that a ‘qualifying individual’ subscribes for ‘eligible shares’ in a ‘qualifying company’.
‘Qualifying Individual’
To be a qualifying individual, Andrew must not be connected with the EIS company. This means that he should not be
an employee (or, at the time the shares are issued, a director) or have an interest in (i.e. control) 30% or more of the
capital of the company. These conditions need to be satisfied throughout the period beginning two years before the share
issue and three years after the ‘relevant date’. Where the relevant date is defined as the later of the date the shares were
issued and the date on which the company commenced trading.
Andrew does not intend to become an employee (or director) of Scalar Limited, but he needs to exercise caution as to
how many shares he subscribes for. If only three investors subscribe for 100% of the shares, each will hold 33% of the
share capital. This exceeds the 30% limit and will mean that EIS relief (other than deferral relief) will not be available.
Therefore, Andrew and the other two investors should ensure not only that the potential fourth investor is recruited, but
that s/he subscribes for sufficient shares, such that none of them will hold 30% or more of the issued share capital, as
only then will they all attain qualifying individual status.
‘Eligible shares’
Qualifying shares need to be new ordinary shares which are subscribed for in cash and fully paid up at the time of issue.
The shares must not be redeemable for at least three years from the relevant date, and not carry any preferential rights
to dividends. On the basis of the information provided, the shares of Scalar Limited would qualify as eligible shares.
‘Qualifying Company’
The company must be unquoted, not controlled by another company, and engaged in qualifying business activities. The
latter requires that the company engage in a trading activity, which is carried on wholly or mainly in the UK, throughout
the three years following the relevant date. While certain trading activities, such as dealing in shares or trading in land,
are excluded, the manufacturing trade Scalar Limited proposes to carry on will qualify.
However, it is also necessary for at least 80% of the money raised to be used for the qualifying business activity within
12 months of the relevant date and the remaining 20% to be so used within the following 12 months. Andrew and the
other investors will thus have to ensure that Scalar Limited has not raised more funds than it is able to employ in the
business within the appropriate time periods.
Reliefs available:
Andrew can claim income tax relief at 20% income tax relief on the amount invested up to a maximum of ￡200,000
in any one tax year. The relief is given in the form. of a tax reducing allowance, which can reduce the investor’s income
tax liability to nil, but cannot be used to generate a tax refund. If the investment is made prior to 6 October in the tax
year, then 50% of the amount invested (up to a maximum of ￡25,000) can be treated as having been made in the
previous tax year.
Any capital gains arising on the sale of EIS shares will be fully exempt from capital gains tax provided that income tax
relief was given on the investment when made and has not been withdrawn. If the EIS shares are disposed of at a loss,
capital losses are still allowable, but reduced by the amount of any EIS relief attributable to the shares disposed of.
In addition, gains from the disposal of other assets can be deferred against the base cost of EIS shares acquired within
one year before and three years after their disposal. Such gains will, thus, not normally become chargeable until the EIS
shares themselves are disposed of. Further, for deferral relief to be available, it is not necessary for the investment to
qualify for EIS income tax relief, i.e. deferral is available even where the investor is not a qualifying individual. Thus,
Andrew could still defer the gain arising on the disposal of the residential property lease made in order to raise part of
the funds for his EIS investment, even if no fourth investor were to be found and his shareholding were to exceed 30%
of the issued share capital of Scalar Limited. Does not require the existence of income tax relief in order to be claimed.
Withdrawal of relief:
Any EIS relief claimed by Andrew will be withdrawn (partially or fully) if, within three year of the relevant date:
(1) he disposes of the shares;
(2) he receives value from the company;
(3) he ceases to be a qualifying individual; or
(4) Scalar Limited ceases to be a qualifying company.
With regard to receiving value from the company, the definition excludes dividends which do not exceed a normal rate
of return, but does include the repayment of any loans made to the company before the shares were issued, the provision
of benefits and the purchase of assets from the company at an undervalue. In this regard, Andrew and the other
subscribers should ensure that the ￡50,000 they are to invest in Scalar Limited as loan capital is appropriately timed
and structured relative to the issue of the EIS shares.

第16题：

6 Sergio and Gerard each inherited a half interest in a property, ‘Hilltop’, in October 2005. ‘Hilltop’ had a probate value

of ￡124,000, but in November 2005 it was badly damaged by fire. In January 2006 the insurance company made

a payment of ￡81,700 each to Sergio and Gerard. In February 2006 Sergio and Gerard each spent ￡55,500 of the

insurance proceeds on restoring the property. ‘Hilltop’ was worth ￡269,000 following the restoration work. In July

2006, Sergio and Gerard sold ‘Hilltop’ for ￡310,000.

Sergio is 69 years old and a widower with three adult children and seven grandchildren. His annual income consists

of a pension of ￡9,900 and interest of ￡300 on savings of ￡7,600 in a bank deposit account. Sergio owns his home

but no other significant assets. He plans to buy a domestic rental property with the proceeds from the sale of ‘Hilltop’,

such that on his death he will have a significant asset which can be sold and divided between the members of his

family.

Gerard is 34 years old. He is employed by Fizz plc on a salary of ￡66,500 per year together with a performance

related bonus. Gerard estimates that he will receive a bonus in December 2007 of ￡4,500, in line with previous

years, and that his taxable benefits in the tax year 2007/08 will amount to ￡7,140. He also expects to receive

dividends from UK companies of ￡1,935 and bank interest of ￡648 in the tax year 2007/08. Gerard intends to set

up a personal pension plan in August 2007. He has not made any pension contributions in the past and proposes to

use part of the proceeds from the sale of ‘Hilltop’ to make the maximum possible tax allowable contribution.

Fizz plc has announced that it intends to replace the performance related bonus scheme with a share incentive plan,

also linked to performance, with effect from 6 April 2008. Gerard estimates that Fizz plc will award him free shares

worth ￡2,100 each year. He will also purchase partnership shares worth ￡700 each year and, as a result, will be

awarded matching shares (further free shares) worth ￡1,400.

Required:

(a) Calculate the chargeable gains arising on the receipt of the insurance proceeds in January 2006 and the sale

of ‘Hilltop’ in July 2006. You should assume that any elections necessary to minimise the gain on the receipt

of the insurance proceeds have been submitted. (4 marks)

正确答案：

第17题：

(b) (i) Explain, by reference to Coral’s residence, ordinary residence and domicile position, how the rental

income arising in respect of the property in the country of Kalania will be taxed in the UK in the tax year

2007/08. State the strategy that Coral should adopt in order to minimise the total income tax suffered

on the rental income. (7 marks)

正确答案：
(b) (i) UK tax on the rental income
Coral is UK resident in 2007/08 because she is present in the UK for more than 182 days. Accordingly, she will be
subject to UK income tax on her Kalanian rental income.
Coral is ordinarily resident in the UK in 2007/08 as she is habitually resident in the UK.
Coral will have acquired a domicile of origin in Kalania from her father. She has not acquired a domicile of choice in the
UK as she has not severed her ties with Kalania and does not intend to make her permanent home in the UK.
Accordingly, the rental income will be taxed in the UK on the remittance basis.
Any rental income remitted to the UK will fall into the basic rate band and will be subject to income tax at 22% on the
gross amount (before deduction of Kalanian tax). Unilateral double tax relief will be available in respect of the 8% tax
suffered in Kalania such that the effective rate of tax suffered by Coral in the UK on the grossed up amount of income
remitted will be 14%.
In order to minimise the total income tax suffered on the rental income Coral should ensure that it is not brought into or
used in the UK such that it will not be subject to income tax in the UK.
Coral should retain evidence, for example bank statements, to show that the rental income has not been removed from
Kalania. Coral can use the money whilst she is on holiday in Kalania with no UK tax implications.

第18题：

(b) You are the manager responsible for the audit of Poppy Co, a manufacturing company with a year ended

31 October 2008. In the last year, several investment properties have been purchased to utilise surplus funds

and to provide rental income. The properties have been revalued at the year end in accordance with IAS 40

Investment Property, they are recognised on the statement of financial position at a fair value of $8 million, and

the total assets of Poppy Co are $160 million at 31 October 2008. An external valuer has been used to provide

the fair value for each property.

Required:

(i) Recommend the enquiries to be made in respect of the external valuer, before placing any reliance on their

work, and explain the reason for the enquiries; (7 marks)

正确答案：
(b) (i) Enquiries in respect of the external valuer
Enquiries would need to be made for two main reasons, firstly to determine the competence, and secondly the objectivity
of the valuer. ISA 620 Using the Work of an Expert contains guidance in this area.
Competence
Enquiries could include:
– Is the valuer a member of a recognised professional body, for example a nationally or internationally recognised
institute of registered surveyors?
– Does the valuer possess any necessary licence to carry out valuations for companies?
– How long has the valuer been a member of the recognised body, or how long has the valuer been licensed under
that body?
– How much experience does the valuer have in providing valuations of the particular type of investment properties
held by Poppy Co?
– Does the valuer have specific experience of evaluating properties for the purpose of including their fair value within
the financial statements?
– Is there any evidence of the reputation of the valuer, e.g. professional references, recommendations from other
companies for which a valuation service has been provided?
– How much experience, if any, does the valuer have with Poppy Co?
Using the above enquiries, the auditor is trying to form. an opinion as to the relevance and reliability of the valuation
provided. ISA 500 Audit Evidence requires that the auditor gathers evidence that is both sufficient and appropriate. The
auditor needs to ensure that the fair values provided by the valuer for inclusion in the financial statements have been
arrived at using appropriate knowledge and skill which should be evidenced by the valuer being a member of a
professional body, and, if necessary, holding a licence under that body.
It is important that the fair values have been arrived at using methods allowed under IAS 40 Investment Property. If any
other valuation method has been used then the value recognised in the statement of financial position may not be in
accordance with financial reporting standards. Thus it is important to understand whether the valuer has experience
specifically in providing valuations that comply with IAS 40, and how many times the valuer has appraised properties
similar to those owned by Poppy Co.
In gauging the reliability of the fair value, the auditor may wish to consider how Poppy Co decided to appoint this
particular valuer, e.g. on the basis of a recommendation or after receiving references from companies for which
valuations had previously been provided.
It will also be important to consider how familiar the valuer is with Poppy Co’s business and environment, as a way to
assess the reliability and appropriateness of any assumptions used in the valuation technique.
Objectivity
Enquiries could include:
– Does the valuer have any financial interest in Poppy Co, e.g. shares held directly or indirectly in the company?
– Does the valuer have any personal relationship with any director or employee of Poppy Co?
– Is the fee paid for the valuation service reasonable and a fair, market based price?
With these enquiries, the auditor is gaining assurance that the valuer will perform. the valuation from an independent
point of view. If the valuer had a financial interest in Poppy Co, there would be incentive to manipulate the valuation in
a way best suited to the financial statements of the company. Equally if the valuer had a personal relationship with a
senior member of staff at Poppy Co, the valuer may feel pressured to give a favourable opinion on the valuation of the
properties.
The level of fee paid is important. It should be commensurate with the market rate paid for this type of valuation. If the
valuer was paid in excess of what might be considered a normal fee, it could indicate that the valuer was encouraged,
or even bribed, to provide a favourable valuation.

第19题：

问答题

Flea market can be found on almost every campus. Although some sell new products in these markets, most students go there to sell used articles, such as textbooks, test preparation materials, dictionaries, and CDs. This has aroused different reactions. Some view it as a meaningful method to dispose of things no longer useful, but some others, especially teachers, view it as a symbol of wasting. What is your opinion about getting rid of used things in this way? Write a composition of about 400 words on the following topic:My Opinion on Campus Flea MarketIn the first part of your writing you should present your thesis statement, and in the second part you should support the thesis statement with appropriate details. In the last part you should bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the above instructions may result in a loss of marks.

正确答案：
My Opinion on Campus Flea Market As we university students progress from one grade to another, we may find that besides other things, we have accumulated a large pile of things that is no longer useful, for example, textbooks, test preparation materials, tapes and CDs. How to deal with the pile is really a big problem. Some throw them away, some prepare to keep them as souvenirs, and some sell them in flea market on campus. I find the last choice is the best one, because flea market actually can bring many benefits.
Flea market has much to offer for sellers. Obviously it can help sellers get some money. By selling things that are no longer needed, they can cover some of the original cost. This can be of much importance to students who do not have their own income. Last semester I sold about 30 books in the flea market, and the money was enough to cover my food bill for almost a month. Besides, selling things in flea market can also help sellers cultivate a good habit of making the fullest use of their belongings. This will prevent them from throwing things away at will, thus becoming a thrifty person.
If it just benefits sellers, flea market cannot be so prosperous. In fact, buyers also stand to gain a lot. Things sold in this place are usually much cheaper than the new ones in stores, but the function is almost the same. If they buy their textbooks and other reference books here, they can save about 200 yuan every semester. It is said that second-hand book stores are very popular in foreign countries, and many students from poor families finish their colleges by getting most of books there. Here in China there are also many students troubled by financial difficulty. If university authority can organize a regular market, many poor students will find it easier to finish their university.
The third benefit, which is usually neglected, is the positive influence on environment. This may sound irrelevant, but in fact, when we are using used products, we can help save paper, save printing materials, and this can greatly reduce the negative impact on the already fragile environment. What's more, if we develop the habit of reusing products, we can make our contribution to the establishing of a recycling economy that the government is advocating. Experts estimate that if all textbooks in universities can be used once again, we can save about 100 million yuan in environmental protection. This fully demonstrates the social significance of the tiny market place.
Therefore, if well managed, flea markets on campus can benefit sellers, buyers and the whole society as well. Of course, we should not sell everything used, for some of them may become valuable souvenirs all our life. It will be a pity if you graduate empty-handed. But as for those things that we can get rid of, we should carry them to the flea market rather than the dustbin.

解析：
这道题要求讨论对于校园里的跳蚤市场的态度，而这篇文章作者分别从对卖者、买者和对环境保护这三个角度阐述了这种市场的好处。作者在说明跳蚤市场的好处时，没有停留在省钱这个肤浅的层次上，而是深入探讨了它对卖者习惯的培养、对买者的大学教育以及对建设循环经济和保护环境的意义，这无疑加深了文章的深度。作者不是单一使用逻辑推理，除了推理性的解释外，作者还用到了自己的经历、专家证言和数据等。这有助于增强文章的说服力。

第20题：

问答题

Test 10　　The life of living in dormitory is quite different from that of living at home. How to keep a harmonious relationship with roommates is a challenge for many college students. What do you think is the best way to keep a harmonious relationship in dormitory?　　Write a composition of about 200 words on the following topic:The Best Way to Keep a Harmonious Relationship in Dormitory　　You are to write in three parts.　　In the first part, state specifically what your opinion is.　　In the second part, provide one or two reasons to support your opinion.　　In the last part, bring what you have written to a natural conclusion or make a summary.　　Marks will be awarded for content, organization, language and appropriateness. Failure to follow the instructions may result in a loss of marks.

正确答案：
【参考范文】
The Best Way to Keep a Harmonious Relationship in Dormitory When we mention the phrase “dormitory life”, a vision of wild parties and loud music probably pops into our mind. It is true that the dormitory relationship can easily run into trouble, confusion and tension for all kinds of reasons. But is there anything we can do to solve this problem? For me, the best way is communication.
Communication is vital to any relationship, especially to the dormitory relationship. Students sharing the same dorm come from different family backgrounds and thus have different life styles, habits and characters. Without communication, misunderstanding will be frequent and unavoidable. In the practice of communication, roommates should, first of all, share openly their expectations on issues, such as cleanliness, visitation, music, study time and lights out, before they have problems and get out of control. Once common understanding has been reached, we get the guide for our everyday conduct. Furthermore, it may be necessary to make adjustments as new issues may constantly arise in the future life. Therefore, continuous communication is by all means necessary for us to avoid possible misunderstanding or conflicts.
In conclusion, we may be able to enjoy a harmonious dormitory relationship by means of communication, and in this case the dormitory may become our second sweet home away from home.

解析：暂无解析

第21题：

问答题

Test 13　　We are now living in a society of severe competition. Students need to compete for better school; companies compete for better products and more customers. Many people neglect the role of cooperation. What do you think of the relationship between competition and cooperation?　　Write on ANSWER SHEET TWO a composition of about 200 words on the following topic:COMPETITION AND COOPERATION　　You are to write in three parts.　　In the first part, state specifically what your idea is.　　In the second part, provide one or two reasons to support your idea OR describe your idea.　　In the last part, bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the instructions may result in a loss of marks.

正确答案：
【参考范文】
It is often believed that competition and cooperation are in opposition to each other. We are now living in a society of severe competition. Students need to compete for better schools; companies have to compete for better products and more customers. And there is constant competition for jobs, fame, and wealth and so on. Cooperation is often neglected by many people. Here I would like to say that both competition and cooperation play an important role in social progress.
Competition is the impetus of the constant development of the human society. The pressure of competition can force people to try their best and give people a sense of the pursuit of excellence. Without competition people would be satisfied with their present condition and society would not advance. A strong desire to succeed and do better than others inspires us to work harder. However, we also need to know the importance of cooperating with others. It’s unimaginable for an individual to live without society. In many cases, people need to cooperate with each other to overcome difficulties. Mere competition may lead to failure.
To succeed in life, we must learn that both com- petition and cooperation are indispensable. Competition will make us always be active to create while cooperation gives us the possibility of working together to overcome obstacles.

解析：暂无解析

第22题：

问答题

People should be realistic rather than romantic in order to live a better life. Write a composition of about 400 words on the following topic, expressing your view on this. ROMANTIC OR REALISTIC　　In the first part of your writing you should present your thesis statement, and in the second part you should support the thesis statement with appropriate details. In the last part you should bring what you have written to a natural conclusion or a summary.　　Marks will be awarded for content, organization, grammar and appropriateness. Failure to follow the above instructions may result in a loss of marks.

正确答案：
ROMANTIC OR REALISTIC Young people tend to think that real life is as dramatic and fascinating as it is in the novels and movies, while more experienced adults disregard this opinion. Adults think this kind of naive daydream will only be destroyed by later experiences and every one should learn to get used to tedious everyday life. In fact, I believe this is a question of more than one aspect. Realism is necessary, but idealism is also indispensable to increase the quality of our life.
Let' s first take a glance at realism and idealism in literature to see which is the reflection of human life. There have been many great realistic works describing a certain period of history. These books not only shook the world of their times, but also keep moving for centuries, among them Oliver Twist and Uncle Tom's Cabin. But many romantic stories gained high popularity as well, such as Scarlet Letter and Gone with the Wind. The literature will lose its glamour without either kind of works.
The same is true in our life. In order to support ourselves, we should learn to produce something to lead a decent career and to earn a living that is our work, and it's realistic. But everyone can imagine what life will look like if we can not enjoy our favorite music, if all the gardens are filled with apple trees instead of red roses and golden tulips, if going fishing is not for relaxing but for earning money. That is a gray and dull picture of life. No one intends to turn our world into a world like that. Furthermore, even when we work, we can do it well and enjoy it only when we have a genuine love of it. So it is dear that romance is as important as reality.
To see the importance of romance more dearly, we must think of the goal of our work, of our joint efforts. We work hard in order to make the world a better place to live in, in order to create more pleasant life for ourselves and our successors. If we sacrifice romance just because we want to do better work, we go away from our destination. It is unwise as anybody can see.
So what we should do is to enjoy the blue of a clear sky, enjoy the harmony on a violin string, enjoy the excitement of sports, enjoy each deep feeling pressed on our hearts, for that is just the way life should be. However, when there are some young people who go too far away from reality, we might help them adjust and think more hardheadedly.

解析：
本文开门见山提出观点：现实和浪漫都是美好生活不可或缺的，然后作者从文学作品和现实生活两方面进行了论述。第四段中作者指出工作的目的是为了享受生活，由此引出最后一段：浪漫与现实必须相结合，一个人不能太过脱离现实。

第23题：

问答题

Write a composition of no fewer than 120 words,giving your opinion on the following topic:　　Smoking should be banned in public places.　　Please write your composition on the Answer Sheet. (20 marks)

正确答案：
Many people are against the opinion that smoking should be banned in public places for it takes away the smokers’ rights, however, in my mind, it protects more people’s rights and we should strongly support it.
Smoking in public places has many bad effects. On the one hand, it harms the health of the people around, for as we know, smoking can cause more damage to the passive smokers than to the smokers. On the other hand, it pollutes the environment by giving off poisonous gas into the air, which may make other people feel uncomfortable.
Banning smoking in public places is very important and necessary to protect our health and environment. The smokers do have their rights to smoke, but they should enjoy their rights on the basis of not harming that of the others.

解析：暂无解析

(b) Advise Sergio on the appropriateness of investing in a domestic rental property in view of his personalcircumstances and recommend suitable alternative investments giving reasons for your advice. (4 marks)

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