CPA Advanced Level
Advanced Taxation cheat sheet
Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.
Partnerships
- When a partner joins or retires during the year, split the period at the exact date of the change and share each part's profit in the ratio in force during that part.
- A retiring partner shares only in the profit before retirement, and a new partner only in the profit after admission.
- Converting a partnership into a limited company is a cessation of the partnership's business and a commencement of the company's, with specific rules for the transfer of assets.
- Where a partnership's records are incomplete, taxable profit is reconstructed by indirect methods, such as the net worth or expenditure approaches, rather than computed directly.
- Kenyan and persuasive foreign case law shows how the Income Tax Act's partnership provisions apply to disputed facts.
Key terms
- Admission of a new partner and retiring partners during the year
- Requires apportioning the partnership's profit between the periods before and after the change, and reallocating each period's profit according to the profit-sharing ratio in effect at the time.
- Conversion of partnerships into limited companies
- Triggers a cessation of the partnership's business for tax purposes and commencement of the company's, with specific rules governing the transfer of assets and any resulting tax consequences.
- Incomplete records pertaining to partnership businesses
- Where a partnership's records are incomplete, taxable profit must be reconstructed using indirect methods (e.g. net worth or expenditure approaches, mirroring the indirect asset-tracing methods in CFFE Planning and Conducting Formal Investigations) rather than being computed directly.
- Case law on taxation of partnership businesses
- Kenyan and persuasive foreign case law clarifies how the Income Tax Act's partnership provisions apply to specific, often disputed, factual situations.
The rest of the sheet covers
- Limited companies
- Value added tax administration
- Tax investigations
- Tax dispute resolution
- Cross-border taxation
- Tax planning
- Tax systems and policies
- Professional practice in taxation
- Worked examples
- Exam technique and revision
- Glossary