In the UK today ________.

A.We have a new friend today

B.We have two new friends today

C.I'm from the UK

A.A.universities in the UK have produced too much good forgraduates

B.B.such abstract subjects as philosophy is no longer useful

C.C.education should serve the social needs

D.D.it is advisable for today’s philosophers to know computerscience

(b) Draft a report as at today’s date advising Cutlass Inc on its proposed activities. The report should cover the

following issues:

(i) The rate at which the profits of Cutlass Inc will be taxed. This section of the report should explain:

– the company’s residency position and what Ben and Amy would have to do in order for the company

to be regarded as resident in the UK under the double tax treaty;

– the meaning of the term ‘permanent establishment’ and the implications of Cutlass Inc having a

permanent establishment in Sharpenia;

– the rate at which the profits of Cutlass Inc will be taxed on the assumption that it is resident in the

UK under the double tax treaty and either does or does not have a permanent establishment in

Sharpenia. (9 marks)

4 Assume today’s date is 5 February 2006.

Joanne is 37, she was born and until 2005 had lived all her life in Germany. She recently married Fraser, aged 38,

who is a UK resident, but who worked briefly in Germany. They have no children.

The couple moved to the UK to live permanently on 9 October 2005. Joanne was employed by an American company

in Germany, and she continued to work for them in the UK until the end of November 2005. Her earnings from the

American company were ￡5,000 per month. Joanne has not remitted any of the income she earned in Germany prior

to her arrival in the UK.

Joanne resigned from her job at the end of November 2005. The company did not hold her to the three months notice

stipulated in her contract, but still paid her for that period. In total, Joanne paid ￡4,200 in UK income tax under PAYE

for the tax tear 2005/06.

Joanne also wishes to sell the shares she holds in a German listed company. The shareholding cost the equivalent of

￡3,500 in September 1986, and its current value is ￡21,500. She intends to sell the shares in March 2006 and to

invest the proceeds from the sale in the UK. Joanne has made no other capital disposals in the year.

Prior to her leaving employment, Joanne investigated the possibility of starting her own business providing a German

translation service for UK companies, and took some advice on the matter. She paid consultancy fees of ￡5,000

(excluding value added tax (VAT)) and bought a computer for ￡2,000 (excluding VAT), both on 23 October 2005.

Joanne started trading on 1 December 2005. She made sales of ￡2,000 in December, and estimates that her sales

will rise by ￡1,000 every month to a maximum of ￡7,000 per month. Joanne believes that her monthly expenses of

￡400 (excluding VAT) will remain constant. Her year end will be 31 March, and the first accounts will be drawn up

to 31 March 2006.

Although Joanne has registered her business for tax purposes with the Revenue, she has not registered for VAT and

is unsure what is required of her in this respect.

Required:

(a) State, giving reasons, whether Joanne will be treated as resident or non-resident in the UK for the year of

assessment 2005/06, together with the basis on which her income and gains of that year will be subject to

UK taxation. (3 marks)

2 Assume that today’s date is 1 July 2005.

Jan is aged 45 and single. He is of Danish domicile but has been working in the United Kingdom since 1 May 2004

and intends to remain in the UK for the medium to long term. Although Jan worked briefly in the UK in 1986, he

has forgotten how UK taxation works and needs some assistance before preparing his UK income tax return.

Jan’s salary from 1 May 2004 was ￡74,760 per annum. Jan also has a company car – a Jaguar XJ8 with a list price

of ￡42,550 including extras, and CO2 emissions of 242g/km. The car was available to him from 1 July 2004. Free

petrol is provided by the company. Jan has other taxable benefits amounting to ￡3,965.

Jan’s other 2004/05 income comprises:

￡

Dividend income from UK companies (cash received) 3,240

Interest received on an ISA account 230

Interest received on a UK bank account 740

Interest remitted from an offshore account (net of 15% withholding tax) 5,100

Income remitted from a villa in Portugal (net of 45% withholding tax) 4,598

The total interest arising on the offshore account was ￡9,000 (gross). In addition, Jan has not remitted other

Portuguese rental income arising in the year, totalling a further ￡1,500 (gross).

Jan informs you that his employer is thinking of providing him with rented accommodation while he looks for a house

to buy. The accommodation would be a two bedroom flat, valued at ￡155,000 with an annual value of ￡6,000. It

would be made available from 6 August 2005. The company will pay the rent of ￡600 per month for the first six

months. All other bills will be paid by Jan.

Jan also informs you that he has 25,000 ordinary shares in Gilet Ltd (‘Gilet’), an unquoted UK trading company. He

has held these shares since August 1986 when he bought 2,500 shares at ￡4.07 per share. In January 1994, a

bonus issue gave each shareholder nine shares for each ordinary share held. In the last week all Gilet’s shareholders

have received an offer from Jumper plc (‘Jumper’) who wishes to acquire the shares. Jumper has offered the following:

– 3 shares in Jumper (currently trading at ￡3.55 per share) for every 5 shares in Gilet, and

– 25p cash per share

Required:

(a) Calculate Jan’s 2004/05 income tax (IT) payable. (11 marks)

19 years respectively. Alvaro and Maria have lived in the country of Koruba since 1982. On 1 July 2005 the family

moved to the UK to be near Alvaro’s father, Ray, who was very ill. Alvaro and Maria are UK resident, but not ordinarily

resident in the tax years 2005/06 and 2006/07. They are both domiciled in the country of Koruba.

On 1 February 2007 Ray Pelorus died. He was UK domiciled, having lived in the UK for the whole of his life. For the

purposes of inheritance tax, his death estate consisted of UK assets, valued at ￡870,000 after deduction of all

available reliefs, and a house in the country of Pacifica valued at ￡94,000. The executors of Ray’s estate have paid

Pacifican inheritance tax of ￡1,800 and legal fees of ￡7,700 in respect of the sale of the Pacifican house. Ray left

the whole of his estate to Alvaro.

Ray had made two gifts during his lifetime:

(i) 1 May 2003: He gave Alvaro 95 acres of farm land situated in the UK. The market value of the land was

￡245,000, although its agricultural value was only ￡120,000. Ray had acquired the land on

1 January 1996 and granted an agricultural tenancy on that date. Alvaro continues to own the

land as at today’s date and it is still subject to the agricultural tenancy.

(ii) 1 August 2005: He gave Alvaro 6,000 shares valued at ￡183,000 in Pinger Ltd, a UK resident trading

company. Gift relief was claimed in respect of this gift. Ray had acquired 14,000 shares in

Pinger Ltd on 1 April 1997 for ￡54,600.

You may assume that Alvaro is a higher rate taxpayer for the tax years 2005/06 and 2006/07. In 2006/07 he made

the following disposals of assets:

(i) On 1 July 2006 he sold the 6,000 shares in Pinger Ltd for ￡228,000.

(ii) On 1 September 2006 he sold 2,350 shares in Lapis Inc, a company resident in Koruba, for ￡8,270. Alvaro

had purchased 5,500 shares in the company on 1 September 2002 for ￡25,950.

(iii) On 1 December 2006 he transferred shares with a market value of ￡74,000 in Quad plc, a UK quoted company,

to a UK resident discretionary trust for the benefit of Vito and Sophie. Alvaro had purchased these shares on

1 January 2006 for ￡59,500.

Alvaro has not made any other transfers of value for the purposes of UK inheritance tax. He owns the family house

in the UK as well as shares in UK and Koruban companies and commercial rental property in the country of Koruba.

Maria has not made any transfers of value for the purposes of UK inheritance tax. Her only significant asset is the

family home in the country of Koruba.

Alvaro and his family expect to return to their home in the country of Koruba in October 2007 once Ray’s affairs have

been settled. There is no double taxation agreement between the UK and Koruba.

Required:

(a) Calculate the inheritance tax (IHT) payable as a result of the death of Ray Pelorus. Explain the availability

or otherwise of agricultural property relief and business property relief on the two lifetime gifts made by Ray.

(8 marks)

internationally top-ranked universities, and in the percentage of overseas students it attracts each year. These are significant achievements, too often overlooked. They were not quickly or easily won. In an increasingly competitive world, they can be quickly and permanently lost.

Within the UK, universities deliver huge benefits, particularly well documented in science, technology and medicine, the greatest of which may be the flow of graduates into the workforce. The most remarked-upon, however, is the rapid expansion of our role as innovators with a significant economic impact. In recent years, high-technology and biotechnology clusters have sprung up around a number of research-intensive universities.

Focusing only on what is most easily measured or o immediate economic impact is to miss the deeper point, of course. Through the arts, humanities and social sciences, this country’s universities contribute broadly to society, adding greatly to human well-being. Although universities are offering their best help in the economic downturn, as institutions we are above all for the students of today who will be the workforce, citizens and leaders of tomorrow; the discoveries that will transform. the future; the scholarly insights that will change the way the world thinks and acts.

What has made the UK system so successful？ I point to the quality of water we provide, the talent we attract, and the diversity of strengths that we offer. The diversity of UK universities is partially reflected in our differences in age, size, history, governance, in the makeup of our student bodies, course offerings, the kinds of research we do, the combination of teaching and research, and the balance of academic and professional or pre-professional training.

1.According to the passage, the number of the internationally top-ranked universities in the UK is only less than that of ______ in the world.

A. Japan

B. France

C. Germany

D. the United States

2.According to the author, the most important contribution made by UK universities to society is _______.

A. the quality graduates

B. scientific discoveries

C. technological improvements

D. biotechnological achievementA B C D

3.According to the author, universities should pay more attention to _______.

A. measures with economic impact

B. current issues

C. people and discoveries that will change the future

D. economic downturnA B C D

4.According to the author, UK university system is very successful, because they offer quality education, ________.

A. and attract different kinds of professors and students

B. and all universities are world famous

C. and focus on what is most easily measured

D. attract the talent, and have many strengthsA B C D

5.The passage is probably written by a UK_______.

A. government official

B. educational expert

C. salesman

D. economist

4 (a) For this part, assume today’s date is 1 March 2006.

Bill and Ben each own 50% of the ordinary share capital in Flower Limited, an unquoted UK trading company

that makes electronic toys. Flower Limited was incorporated on 1 August 2005 with 1,000 ￡1 ordinary shares,

and commenced trading on the same day. The business has been successful, and the company has accumulated

a large cash balance of ￡180,000, which is to be used to purchase a new factory. However, Bill and Ben have

received an offer from a rival company, which they are considering. The offer provides Bill and Ben with two

alternative methods of payment for the purchase of their shares:

(i) ￡480,000 for the company, inclusive of the ￡180,000 cash balance.

(ii) ￡300,000 for the company assuming the cash available for the factory purchase is extracted prior to sale.

Bill and Ben each currently receive a gross salary of ￡3,750 per month from Flower Limited. Part of the offer

terms is that Bill and Ben would be retained as employees of the company on the same salary.

Neither Bill nor Ben has used any of their capital gains tax annual exemption for the tax year 2005/06.

Required:

(i) Calculate which of the following means of extracting the ￡180,000 from Flower Limited on 31 March

2006 will result in the highest after tax cash amount for Bill and Ben:

(1) payment of a dividend, or

(2) payment of a salary bonus.

You are not required to consider the corporation tax (CT) implications for Flower Limited in your

answer. (5 marks)

Don't Retire, Start a Micro Business

Retirem ent today is either something that people welcome, or dread. In the UK, the age to qualify for your pension seems to move further away with successive govenments. And with no legal retirement age in the UK, if you want to and your company agrees, you can keep working for as long as you like. Do you want to continue with your employm ent is the question many are asking. A realistic altemative is to start your own micro business.

As the cost of living continues to rise, many in the over 60 age group in particular are looking for altemative ways to make ends meet. But also, how they can take more control of their lives by creating porfolio careers or, staring micro businesses.

The gig economy continues to expand. This fledgling working environm ent continues to define its rules of engagement, but for many, the gig economy has opened a new way to eam an income on their tems. In a report 'Gig Economy Workers and the Future of Retirement', it is found that sixteen percent of Americans plan to take a gig job in their retirem ent. Similar numbers are likely in the UK For those who have no intention of retiring, it is using their business in a dffeent way: a micro business can ensure you have a comfortable retirem ent. If anyone is thinking of winding down his working lives, or that want to make a change, he is to start a new micro business now. Developing this enterprise over the next few years could lead to a healthy second income that could replace the money you will have available if you do fully retire. This is the approach many over 60s are taking as they often top surveys of new business owners. Indeed, the concept of the 'older entrepreneur' is fast becoming the nom, outstipping the often-quoted Mllennial group, as the most entrepreneurial.

21.In the UK, the age for retirem ent and the pension seems to go by working.（）

A.for as long as you like

B.less than sixty

C.till getting the pension

D.till health problems occur

22.What is thelegal age of retirement in the U.SA. according to the passage？（）

A.60

B.65

C.55

D.None of above

23.According to the passage, the realistic suggestion for retired people is（）

A.to keep working

B.to plan second job after retirem ent

C.to take no plans after retirem ent

D.to start their own micro business

24.How many of Americans plan to take a gig job in their retirem ent？（）

A.16%

B.6%

C.60%

D.1.6%

25.The author's atitude that we could infer from the passage is likely to be（）.

A.persuasive

B.suggestive

C.critical

D.offensive

Low-carbon Future：We Can Afford to Go Green

Tackling climate change will cost consumers the earth．Those who campaign for a green revolution are out to destroy our western lifestyles．Such are the cries of opponents of emissions cuts，and their message has political impact：a number of surveys have found that the enthusiasm of voters for policies to reduce climate change falls off as the price tag increases．

However，a new modelling(模型化)exercise suggests that these fears are largely unfounded．It projects that radical cuts to the UK's emissions will cause barely noticeable increases in the price of food，drink and most other goods by 2050．Electricity and petrol costs will rise significantly，but with the right policies in place，say the modellers，this need not lead to big changes in our lifestyle．

"these results show that the global project to fight climate change is feasible，"says Alex Bowen，a climate policy expert at the London School of Economics．"It's not such a big ask as people are making out．"

Although it is impossible to precisely predict prices four decades from now．the exercise is one of the most detailed examinations yet of the impact of climate change policies on UK consumers．It provides a useful rough guide to our economic future．

Though its results speak directly to the UK consumer，previous research has come to similar conclusions for the US．In June，one study found that if the US were to cut emissions by 50 per cent by 2050，prices of most consumer goods would increase by less than 5 per cent．The findings are also consistent with analyses by the Pew Center on Global Climate Change in Washington DC．"Even cutting emissions by 80 per cent over four decades has a very small effect on consumers in most areas，”says Manik Roy of the Pew Center．"The challenge is now to convince consumers and policy-makers that this is the case．"

The Intergovernmental Panel on Climate Change recommends that wealthy nations cut their emissions to between 80 and 95 per cent below 1990 levels by 2050 in order to avoid the worst effects of climate change．The UK government aims to reduce its contribution by 80 per cent and leaders of the other G8 nations have discussed following suit．To meet this goal，industries will have to cut down fossil fuel consumption，and low-carbon power sources will have to massively expand. Companies will have to pay increasingly higher prices for the right to emit greenhouse gases.

How will this affect the average citizen's wallet？ To measure the impact of the 80 per cent target on the UK population, New Scientist approached Cambridge Econometrics, a firm known for its modelling of the European economy. The firm used historic economic data to predict the impact of emissions reductions on prices in over 40 categories of goods and services. It compared the impact of the 80 per cent cut with a baseline situation in which the government takes no action other than the limited emissions restrictions already in place as a result of the Ky-oto protocol (京都议定书).

Most of the price increases are a consequence of rising energy costs, in part because coal and gas are re-placed by more expensive low-carbon sources. The price of electricity is projected to be 15 per cent higher in 2050 compared with the baseline. In today's prices, that would add around ￡5 onto typical monthly household electricity bills. It will also result in higher prices elsewhere, as every industrial sector uses electricity.

But electricity and other forms of energy make up only a small part of the price of most goods. Other factors-raw materials, labour and taxes-are far more important. The energy that goes into producing food, alcoholic drinks and tobacco, for example, makes up just 2 per cent of the consumer price. For motor vehicle purchases and hotel stays, the figure is 1 per cent. Only for energy-intensive industries does the

A．Economic recession is widely spread.

B．Western lifestyles are destroyed.

C．The cost of a green revolution rises.

D．The environment is improved.