Your client, Jessica, has requested advice in the options available to relieve her share of a partnership trading loss.

Jessica:
– Is resident and domiciled in the UK.
– Was employed by Berens Ltd up to 31 March 2018, when she was made redundant.
– Will become a partner in the Langley Partnership on 1 July 2018.
– Has never made any disposals for capital gains tax (CGT) purposes.

Jessica – income from Berens Ltd:
– Jessica received an annual salary from Berens Ltd of £145,000 each year from the tax year 2015/16.
– From 6 April 2017, Jessica was provided with a new company laptop computer, which cost Berens Ltd £850.
Jessica had significant private use of this laptop computer.

Jessica – other income:
– Prior to the tax year 2017/18 Jessica had no other source of income.
– Starting from the tax year 2017/18, Jessica receives rental income of £6,000 each tax year.

Jessica – redundancy package from Berens Ltd:
– The package, received on 31 March 2018, included a statutory redundancy payment of £18,000 and an ex‐gratia payment of £32,000.
– As part of the package, Berens Ltd also allowed Jessica to keep the laptop computer, which had a market value of £540 on 31 March 2018. Note: In 17/18 use benefit :£170 and taxable redundancy payments of £20,680.

The Langley Partnership:
– Prior to 1 July 2018, there were two partners in the partnership – Issa and Finn.
– From 1 July 2018, the profit sharing ratio will be: Issa 20%, Finn 40%, and Jessica 40%.
– The budgeted tax-adjusted trading (loss)/profit of the partnership is:
– Year ending 31 March 2019 – (£160,000)

Required:
(b) (i)
Advise Jessica of the options available to her to relieve her share of the Langley Partnership loss for the year ending 31 March 2019, on the assumption that she does not wish to carry any of her share of the loss forward. (3 marks)

(b) (ii) Determine, by reference to the amount of income tax saved in each case, which of the available loss relief options (as identified in (i) above) will result in the highest overall income tax saving for Jessica.
(7 marks)