The answer of question 9 is incorrect. This is due to error in computation of tax on dividend.
31,000 @ 38.1% is NOT 11,181 but 11,811. Therefore, the correct answer would be £74,411.00 ( I think)

also in example 5, there is a minor error
didn’t add 2600+200, to give 2800 as the total…
kindly correct it ‘opentutuion’,
Thank you for the lectures and notes…!
It’s much better when you started showing the tutor… 🙂

For Example 9, does the 500 nil rate band applied for non saving income ? I got 74,211 same as the answer book but the nil rate band is not applied in the answer book and the answer is still 74,211.

Please clarify how the nil rate band of 1000 and 500 from non saving is applied.

Was attempting example 8 of chapter 2. For the tax liability of non savings income shouldn’t the first £500 be taxed at 0%? In the answers it doesn’t show that this has been done.

Just to let you know, in case if one spouse elects to transfer his/her personal allowance, the allowance transferred will be 1,060. And the spouse who chose to transfer the personal allowance will be left with a personal allowance of 9,540 for deduction. In case if the Adjusted Net income exceeds 9,540 it will be taxed at the basic tax rate.

This was bothering me from the workings of example 12. I thought someone else might have the same question, therefore, I posted a comment for information.

Oh I got it. That 212 tax credit has the same effect as increasing the PA as 10600+1060=11660 and if they just do that, it will be less confusing and straight forward.

For the higher rate band, 40% is charged for income less than or equal to 150,000. So, if you add the Non-savings income of 130,000 and 20,000 for savings it gives a total of 150,000.
Therefore, the remaining balance of 20,000 will be charged at the additional rate band of 45%.

Under transferable amount of PA, What if the income of the spouse with the unused PA is £10,000. Do we still apply the whole of £1,060, considering the unused PA (£600) is less than £1,060?

Yes Ronke, the whole £1,060 will still be transferable to the spouse.
If he/she isn’t transferring, the whole £10,600 PA will still be available (even tho income is £10,000) thereby leaving his taxable income at nil.
I also believe it is good for tax planning purposes if he makes a transfer to the spouse who earns way more than him since his income is low enough to be covered by the PA anyway.

juliarees2010 says

Can someone tell me why the 40k bank interest is split at 40 and 45% please?

Bhoma says

As per Income tax rate various rate

So upto 150000 Use 40%

and above 150000 use 45 %

Bhoma says

Hello,

In personal Allowance there is rule that in above£ 122000 than personal Allowance is not available.so why we calculate that 50%rule

Faisal says

The answer of question 9 is incorrect. This is due to error in computation of tax on dividend.

31,000 @ 38.1% is NOT 11,181 but 11,811. Therefore, the correct answer would be £74,411.00 ( I think)

Yassin says

yup

Yassin says

also in example 5, there is a minor error

didn’t add 2600+200, to give 2800 as the total…

kindly correct it ‘opentutuion’,

Thank you for the lectures and notes…!

It’s much better when you started showing the tutor… 🙂

Daniel says

Hi Tutor,

For Example 9, does the 500 nil rate band applied for non saving income ? I got 74,211 same as the answer book but the nil rate band is not applied in the answer book and the answer is still 74,211.

Please clarify how the nil rate band of 1000 and 500 from non saving is applied.

Thanks

Daniel.

Harry says

Hi Daniel,

It is not applicable as it’s additional rate. The answer is incorrect.

Best wishes

Harry

chandan says

For the example9 – I got the answer of 74,411/ how is it 74,211/ shown in the answer at the back of the notes.

Rodica says

the same 😉

Aysha says

Hi,

Was attempting example 8 of chapter 2. For the tax liability of non savings income shouldn’t the first £500 be taxed at 0%? In the answers it doesn’t show that this has been done.

F says

Hi Guys

Just to let you know, in case if one spouse elects to transfer his/her personal allowance, the allowance transferred will be 1,060. And the spouse who chose to transfer the personal allowance will be left with a personal allowance of 9,540 for deduction. In case if the Adjusted Net income exceeds 9,540 it will be taxed at the basic tax rate.

This was bothering me from the workings of example 12. I thought someone else might have the same question, therefore, I posted a comment for information.

Shahmir says

What is the point of 20% of 1060. Why can’t they just say that you can take 212 from your spouse’s PA?

Shahmir says

Oh I got it. That 212 tax credit has the same effect as increasing the PA as 10600+1060=11660 and if they just do that, it will be less confusing and straight forward.

Munaiza says

In Example 9, How is savings split up into 20,000 each. Can you explain Please?

IFEOMA says

Hi Munaiza,

For the higher rate band, 40% is charged for income less than or equal to 150,000. So, if you add the Non-savings income of 130,000 and 20,000 for savings it gives a total of 150,000.

Therefore, the remaining balance of 20,000 will be charged at the additional rate band of 45%.

Hope that helps

Mandip says

Surely only £600 will be transferable, otherwise the spouse would be taxed?

Aderonke says

Under transferable amount of PA, What if the income of the spouse with the unused PA is £10,000. Do we still apply the whole of £1,060, considering the unused PA (£600) is less than £1,060?

Olanrewaju says

Yes Ronke, the whole £1,060 will still be transferable to the spouse.

If he/she isn’t transferring, the whole £10,600 PA will still be available (even tho income is £10,000) thereby leaving his taxable income at nil.

I also believe it is good for tax planning purposes if he makes a transfer to the spouse who earns way more than him since his income is low enough to be covered by the PA anyway.

Aderonke says

Thanks Lanre!