Part A:
Breda incorporated her business on the 1st of January 2023. Her company, Clarke Limited has a 12-month accounting period which will end on the 31st of December 2023.Sample Page
- Breda would like you to explain the schedular system for Irish corporation tax purposes. Explain what schedule and case her news agency trade would fall under and why?
- Explain the different corporation tax rates that apply in Ireland and explain what types of income are subject to these different corporation tax rates.
- Detail what types of expenditure are specifically disallowed when arriving at a company’s case I/II tax-adjusted profit. Explain what types of expenditure are typically allowed in arriving at a company’s case I/II tax-adjusted profit.
- Explain what capital allowances are and when a company might be entitled to claim capital allowances.
- Clarke Limited leased out a property under a 15-year lease on the 1st of January 2023. The annual rent receivable by Clarke Limited is €24,000 and a premium of €20,000 was received upfront by Clarke Limited on the 1st of January 2023. Explain how this income will be taxed for Irish corporation tax purposes.
Part B
Breda’s husband, Steve, purchased development land on the 15th of December 1976 for €50,000. The current use value of the land on the 15th of December 1976 was €10,000. Steve sold this land on the 20th of May 2023 for €450,000.
- Explain the following terms for Breda: ‘development land’, ‘current use value’ and ‘development value’.
- Explain what ‘indexation relief’ is and detail how it is restricted in relation to development land.
- Assuming Steve had no other disposals during the tax year 2023, calculate his capital gains tax liability arising on this sale.
- Outline when Steve’s capital gains tax liability is due to be paid.