content

Question 1

what is the formula for chargeable receipts ?

Answer 1

Chargeable receipts - deductible expenditure - capital allowances (AIA £1m on new, WDA 18% of plant and machinery) = trading profit/loss

then allowable reliefs (interest, prof loss/gain, etc)
then personal allowances
then split tax income and calculate

Question 2

explain 2 methods of protection of minority shareholders: 1) unfair predjudice petitions and 2) Derivative claims

Answer 2

Unfair Prejudice Petitions
- S 994 CA 2006 - allows any shareholder to apply to the court for an order for a remedy where they feel that they have been unfairly prejudiced as a shareholder.
- Potential grounds:
○ the company’s affairs have been conducted in a manner that is unfairly prejudicial to the interests of the members generally, or some part of its members (including the claimant); or
○ an actual or proposed act or omission of the company is or would be so prejudicial.
- The conduct must be prejudicial in that it causes harm to one or more shareholders, and it must also be unfair.
○ Court will require a great deal of evidence before it will decide

Derivative Claims
- Governed by SS 260–264 CA 2006.
○ A derivative claim is a claim instigated by a SH for a wrong done to a company which has arisen from an act or omission of a director.
- When a company decides to issue proceedings, this is a board decision, because it relates to the day-to-day running of the company.
- The point of a derivative claim is to allow SHs to instigate legal action - because the board is neglecting or refusing t
- Claim may only be brought in relation to a cause of action arising from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director S 260(3).