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  1. avatar says

    For the tax year 2014–15 Adam has a salary of £40,000, and during the year he made net personal pension contributions of £4,400. On 15 June 2014 Adam sold an antique table and this resulted in a chargeable gain of £17,500.
    Ans:
    Adam’s taxable income is £30,000 (40,000 less the personal allowance of 10,000). His basic rate tax band is extended to £37,365 (31,865 + 5,500 (4,400 x 100/80)), of which £7,365 (37,365 – 30,000) is unused.

    Does anyone can tell me how come this 100/80 pls?

    • Profile photo of Adekunle says

      It is the standard rate to be applied when calculating charitable donation and building society interest.for instance if the BSi is £2000.You need to gross it up by multiplying 2000 by 100/80=2500 to become your Non savings income and 20% *2500=500 wiil be in the column of tax suffered.
      But if it is charitable donation ,u only calculate for instance 1000*100/80 only .
      Now this will increase the basic band rate from 32865 +200 and the second effect is that will reduce the tax liability of the individual.
      I hope this help
      Ade.

  2. avatar says

    For the tax year 2014–15 Adam has a salary of £40,000, and during the year he made net personal pension contributions of £4,400. On 15 June 2014 Adam sold an antique table and this resulted in a chargeable gain of £17,500.
    Ans:
    Adam’s taxable income is £30,000 (40,000 less the personal allowance of 10,000). His basic rate tax band is extended to £37,365 (31,865 + 5,500 (4,400 x 100/80)), of which £7,365 (37,365 – 30,000) is unused.

    Does anyone can tell me come this 100/80 pls?

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