THE CHARTERED INSTITUTE OF TAXATION
APPLICATION AND PROFESSIONAL SKILLS
Human Capital Taxes
May 2022
TIME ALLOWED
3 HOURS 30 MINUTES
• In order to secure a pass in this exam, you will be required to demonstrate competence in each of
three skills.
You will be assessed across your answer as a whole for Structure. A pass or fail grade will be
awarded.
You will be assessed for competence in a number of broad topics for the following skills:
➢ Identification and Application
➢ Relevant Advice and Substantiated Conclusions
For each topic for each of these two skills, a grade will be awarded. The grades for those topics will
be weighted and averaged to produce a final grade for each skill of 0, 1, 2, 3 or 4. A grade of 3 or 4
is required to demonstrate competence.
• All workings should be shown and made to the nearest month and pound unless the question specifies
otherwise.
• Candidates who answer any law elements in this paper in accordance with Scots law or Northern
Ireland law should indicate this where relevant.
• Scots law candidates may provide answers referring to Land and Buildings Transaction Tax rather
than Stamp Duty Land Tax.
• Unless otherwise indicated by the provision of additional information in the question, you may assume
that 2021/22 legislation (including rates and allowances) continues to apply for 2022/23 and future
years. Candidates answering by reference to more recently enacted legislation or tax cases will not
be penalised.
• You must type your answer in the space on the screen as indicated by the Exam4 guidance.
,You are an employment tax manager in F&C LLP, a firm of Chartered Tax Advisers.
You have received an email (EXHIBIT A) from Milly Coule, the HR Manager of your client Cable plc.
Cable plc is a Bristol-based cabling manufacturer. Milly would like some advice about Tom Crip, who is
Head of Sales for their Irish subsidiary, Eirepipe Ltd.
Tom is a UK national who is employed in Ireland. He came to the UK in December 2020 for personal
reasons. He now wishes to stay permanently. Milly has sent you some information from Tom about his
personal situation (EXHIBIT B). She has also sent information from Doug O’Shear, the Managing Director
of Eirepipe Ltd (EXHIBIT C).
You should assume that the double tax treaty with Ireland follows the OECD Model Convention.
The following exhibits are provided to assist you:
EXHIBIT A: Email from Milly Coule
EXHIBIT B: Email from Tom Crip
EXHIBIT C: Details provided by Doug O’Shear
EXHIBIT D: Pre-seen information
Requirement:
Prepare a draft report to Milly discussing and making recommendations in relation to Tom working
in the UK.
Continued
Page 2 of 9 APS HCT
,Continuation
EXHIBIT A
Email from Milly Coule
To: Employment tax manager, F&C LLP
From: Milly Coule
Date: 2 May 2022
Subject: Tom Crip working in the UK
Dear Manager
I would like your advice in relation to Tom Crip, an employee of our Irish subsidiary, Eirepipe Ltd.
We acquired Eirepipe Ltd in 2017 to enable us to expand into the Irish market. It designs and
manufactures new environmentally friendly products. Historically, Eirepipe Ltd’s clients have been outside
the UK.
Tom Crip is Head of Sales and has an Irish-based sales team. Tom and his team sell all Eirepipe Ltd’s
products but there is a particular focus on increasing sales for a new range of innovative new “ecopipes”
used in industrial ground source heat pumps.
Tom has been in the UK since December 2020 for personal reasons and would like to remain here. I
attach an email he’s sent to me about his personal situation (EXHIBIT B). Also attached is Doug’s
information on Tom’s package and on potential UK sales of ecopipes (EXHIBIT C).
Tom has started to develop relationships with some UK-based companies which could result in significant
sales of ecopipes. Through Tom’s activities in the UK, we think that we can develop a combined client
base for some of our complementary products. As a result, in about a year we are planning to restructure
so some of Eirepipe Ltd’s divisions would be subsumed within Cable plc.
As Tom is integral to this, we are happy to facilitate him remaining in the UK. Doug is happy for Tom to
work here permanently and has asked us to pay him through our UK payroll until the restructure goes
ahead. In principle I’m happy to pay Tom as I’m expecting all costs will be charged back to Eirepipe Ltd.
However, it’s led me to consider whether we should think about taking on Tom as a Cable plc employee
now or have him officially seconded to us to help sell our products. Of course, Doug would need to agree
this. Also, I’m a bit concerned about the past as Tom has been here for over a year already.
I hope this is helpful and I look forward to receiving your recommendations in relation to Tom.
Many thanks
Milly
Continued
Page 3 of 9 APS HCT
, Continuation
EXHIBIT B
Email from Tom Crip
To: Milly Coule
From: Tom Crip
Date: 1 May 2022
Subject: Move to the UK
Hi Milly
As discussed with Doug, please find below information regarding my time in the UK.
I’m a UK national and lived in the UK until 10 March 2018 when I moved to Ireland and started work for
Eirepipe Ltd. Since then, I’ve been non-UK tax resident and paid tax and social security in Ireland.
I was married to Anna until we separated in March 2018. We have two young children who live with Anna
in Cheltenham: Archie is eight and Freya is six. Anna was awarded our family home in our divorce
settlement so I no longer own any property in the UK.
From April 2018 to December 2020, I returned to the UK for one weekend every month plus two weeks’
holiday to see my family. I stayed with my parents in Gloucester when I came to the UK. Archie and Freya
stayed with me there or we went on holiday in the UK.
I came to the UK on 20 December 2020 for a holiday, but whilst here my father fell seriously ill and I
needed to stay at my parents’ home to look after him and my mother. As a result, Doug allowed me to
work remotely from the UK so I’ve remained here since then. Although my Dad is much better now, I’ve
realised that my parents need me to be closer to help out. I’ve also had more time with Archie and Freya
and it’s made me realise how much they need me and how much I’ve been missing them! I also see that
it would help Anna for me to be around more too. Therefore, my aim is to stay permanently in the UK
working remotely for Eirepipe Ltd. I assume I can stay on the same package.
Since being in the UK, I’ve been able to make the job work and have developed relationships with potential
new UK customers hopefully resulting in future UK sales.
I’m planning to rent a UK house (Doug agreed to an allowance for the first 12 months). I’m looking forward
to having a base here so the children can stay with me more often.
I rent a small apartment in Dublin which I plan to give up when I rent a UK house. I haven’t returned to
Ireland since December 2020.
I hope this is helpful but let me know if you have any additional questions.
Best regards
Tom
Continued
Page 4 of 9 APS HCT
APPLICATION AND PROFESSIONAL SKILLS
Human Capital Taxes
May 2022
TIME ALLOWED
3 HOURS 30 MINUTES
• In order to secure a pass in this exam, you will be required to demonstrate competence in each of
three skills.
You will be assessed across your answer as a whole for Structure. A pass or fail grade will be
awarded.
You will be assessed for competence in a number of broad topics for the following skills:
➢ Identification and Application
➢ Relevant Advice and Substantiated Conclusions
For each topic for each of these two skills, a grade will be awarded. The grades for those topics will
be weighted and averaged to produce a final grade for each skill of 0, 1, 2, 3 or 4. A grade of 3 or 4
is required to demonstrate competence.
• All workings should be shown and made to the nearest month and pound unless the question specifies
otherwise.
• Candidates who answer any law elements in this paper in accordance with Scots law or Northern
Ireland law should indicate this where relevant.
• Scots law candidates may provide answers referring to Land and Buildings Transaction Tax rather
than Stamp Duty Land Tax.
• Unless otherwise indicated by the provision of additional information in the question, you may assume
that 2021/22 legislation (including rates and allowances) continues to apply for 2022/23 and future
years. Candidates answering by reference to more recently enacted legislation or tax cases will not
be penalised.
• You must type your answer in the space on the screen as indicated by the Exam4 guidance.
,You are an employment tax manager in F&C LLP, a firm of Chartered Tax Advisers.
You have received an email (EXHIBIT A) from Milly Coule, the HR Manager of your client Cable plc.
Cable plc is a Bristol-based cabling manufacturer. Milly would like some advice about Tom Crip, who is
Head of Sales for their Irish subsidiary, Eirepipe Ltd.
Tom is a UK national who is employed in Ireland. He came to the UK in December 2020 for personal
reasons. He now wishes to stay permanently. Milly has sent you some information from Tom about his
personal situation (EXHIBIT B). She has also sent information from Doug O’Shear, the Managing Director
of Eirepipe Ltd (EXHIBIT C).
You should assume that the double tax treaty with Ireland follows the OECD Model Convention.
The following exhibits are provided to assist you:
EXHIBIT A: Email from Milly Coule
EXHIBIT B: Email from Tom Crip
EXHIBIT C: Details provided by Doug O’Shear
EXHIBIT D: Pre-seen information
Requirement:
Prepare a draft report to Milly discussing and making recommendations in relation to Tom working
in the UK.
Continued
Page 2 of 9 APS HCT
,Continuation
EXHIBIT A
Email from Milly Coule
To: Employment tax manager, F&C LLP
From: Milly Coule
Date: 2 May 2022
Subject: Tom Crip working in the UK
Dear Manager
I would like your advice in relation to Tom Crip, an employee of our Irish subsidiary, Eirepipe Ltd.
We acquired Eirepipe Ltd in 2017 to enable us to expand into the Irish market. It designs and
manufactures new environmentally friendly products. Historically, Eirepipe Ltd’s clients have been outside
the UK.
Tom Crip is Head of Sales and has an Irish-based sales team. Tom and his team sell all Eirepipe Ltd’s
products but there is a particular focus on increasing sales for a new range of innovative new “ecopipes”
used in industrial ground source heat pumps.
Tom has been in the UK since December 2020 for personal reasons and would like to remain here. I
attach an email he’s sent to me about his personal situation (EXHIBIT B). Also attached is Doug’s
information on Tom’s package and on potential UK sales of ecopipes (EXHIBIT C).
Tom has started to develop relationships with some UK-based companies which could result in significant
sales of ecopipes. Through Tom’s activities in the UK, we think that we can develop a combined client
base for some of our complementary products. As a result, in about a year we are planning to restructure
so some of Eirepipe Ltd’s divisions would be subsumed within Cable plc.
As Tom is integral to this, we are happy to facilitate him remaining in the UK. Doug is happy for Tom to
work here permanently and has asked us to pay him through our UK payroll until the restructure goes
ahead. In principle I’m happy to pay Tom as I’m expecting all costs will be charged back to Eirepipe Ltd.
However, it’s led me to consider whether we should think about taking on Tom as a Cable plc employee
now or have him officially seconded to us to help sell our products. Of course, Doug would need to agree
this. Also, I’m a bit concerned about the past as Tom has been here for over a year already.
I hope this is helpful and I look forward to receiving your recommendations in relation to Tom.
Many thanks
Milly
Continued
Page 3 of 9 APS HCT
, Continuation
EXHIBIT B
Email from Tom Crip
To: Milly Coule
From: Tom Crip
Date: 1 May 2022
Subject: Move to the UK
Hi Milly
As discussed with Doug, please find below information regarding my time in the UK.
I’m a UK national and lived in the UK until 10 March 2018 when I moved to Ireland and started work for
Eirepipe Ltd. Since then, I’ve been non-UK tax resident and paid tax and social security in Ireland.
I was married to Anna until we separated in March 2018. We have two young children who live with Anna
in Cheltenham: Archie is eight and Freya is six. Anna was awarded our family home in our divorce
settlement so I no longer own any property in the UK.
From April 2018 to December 2020, I returned to the UK for one weekend every month plus two weeks’
holiday to see my family. I stayed with my parents in Gloucester when I came to the UK. Archie and Freya
stayed with me there or we went on holiday in the UK.
I came to the UK on 20 December 2020 for a holiday, but whilst here my father fell seriously ill and I
needed to stay at my parents’ home to look after him and my mother. As a result, Doug allowed me to
work remotely from the UK so I’ve remained here since then. Although my Dad is much better now, I’ve
realised that my parents need me to be closer to help out. I’ve also had more time with Archie and Freya
and it’s made me realise how much they need me and how much I’ve been missing them! I also see that
it would help Anna for me to be around more too. Therefore, my aim is to stay permanently in the UK
working remotely for Eirepipe Ltd. I assume I can stay on the same package.
Since being in the UK, I’ve been able to make the job work and have developed relationships with potential
new UK customers hopefully resulting in future UK sales.
I’m planning to rent a UK house (Doug agreed to an allowance for the first 12 months). I’m looking forward
to having a base here so the children can stay with me more often.
I rent a small apartment in Dublin which I plan to give up when I rent a UK house. I haven’t returned to
Ireland since December 2020.
I hope this is helpful but let me know if you have any additional questions.
Best regards
Tom
Continued
Page 4 of 9 APS HCT
