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Chapter 2 – Income tax computation TX-UK FA2023

VIVA

Reader Interactions

Comments

  1. menpagalhoon says

    April 29, 2025 at 1:10 pm

    Are these lectures valid for june 2025 attempt?

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    • mrjonbain says

      May 2, 2025 at 4:59 am

      Please see the following thread-

      https://opentuition.com/topic/tx-uk-can-i-use-current-lectures-for-june-2025-exam/

      Log in to Reply
  2. Abreham says

    December 25, 2024 at 1:20 pm

    Thank you very much!

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  3. SwissCheese says

    December 13, 2024 at 7:20 am

    For Example 5 (4th Video, 11:09 minutes, that should be savings income Nil rate band (SINRB) instead of Starting Rate (SR) for the first 1000 gbp of the savings income right?

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  4. Agna says

    December 7, 2024 at 11:05 am

    Hello , I have a question .
    In last video MQT3 question- you put that 500 pounds dividend is not taxable , when in your notes states everyone gets 1000 pound relief from tax when it comes to dividend . Would you mind to explain , did I misunderstood something ?

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    • raiyanr21 says

      January 5, 2025 at 1:00 pm

      The first £1000 is not taxed under dividend income regardless of what tax rate band their income goes into.

      If for example you have a dividend of £5000

      The first £1000 benefits from a 0% tax relief so the tax liability is 0 for the first £1000
      the remaining £4000 will be taxed based on what tax rate band your income falls into.

      Hope this helps 🙂

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    • mastyjb says

      March 19, 2025 at 10:43 pm

      There was only £500 dividends. You cant claim what does not exist.

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  5. Dloluwa says

    November 12, 2024 at 4:42 am

    Thank you so much Miss Jill for teaching so well.
    I have a question on the use of gross donations. I noticed that it was deducted from the total income in some questions and it was not deducted in some others. In what cases do we deduct the gross donation from the total income to arrive at our our ANI?

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    • enver says

      November 24, 2024 at 6:09 pm

      Charity donation might affect PA. For example, if the income for the year is £105,000, PA would be reduced by £2500 (105k-100k * 0.5)
      But if the donation of 5k gross made, it would reduce ANI by 5k, hence ANI = 100k -> you get full amount of PA. Long story short, you need to keep donations in mind when calculating ANI, if income is in the 100-120k range.

      In all the other cases, donation amount is used to extend BR and HR bands to ensure no tax paid for the amount of the donation

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  6. raina0806 says

    October 24, 2024 at 8:06 pm

    In MCQ1, why was gift aid donation deducted from the taxable income? We’ve never done that in the previous calculations.

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  7. SwissCheese says

    October 15, 2024 at 5:25 pm

    Hello. Just want to clarify something.
    Is the Tax band determined by the Total income or the Taxble income once we have deducted the Personal allowance?

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    • Sanjee says

      October 20, 2024 at 5:26 pm

      I am confused on this questions, I believe its the taxable income after PA.

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  8. babyseason says

    October 5, 2024 at 6:03 pm

    Hi,
    i want to ask that , due to the gift aid donations,the basic rate band will move above the orignal 37700 , for example, 40000 . Now , someone’s taxable income is 38700,(between 37700 and 40000), then ,would 38700 be considered basic income or high income?

    thank you!

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  9. OanaMihaela says

    July 25, 2024 at 5:01 pm

    Hello,

    In the Lecture Notes I believe the answer to example 12 is wrong. (W3) shows that £87,440 should be charged at higher rate however the calculations are for £112,300. Am I missing something?

    Thank you very much in advance!

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    • kschamoo says

      August 17, 2024 at 1:01 pm

      Yes, the input figure £112,300.00 is wrong. It is confirmed below in the example 12 (w3) calculation.

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  10. Dead0k says

    July 9, 2024 at 8:04 pm

    Great. I am happy that I could solve final MCQ questions on my own with one little mistake with dividends rates (forgot they are different) at the end.

    You said there is plenty of time on the exam to even make full proforma.
    From what I see, Multiple Choice Questions (Sections A and B): 1.5 minutes per question. Are these will require to build full proforma? because I assume 1.5 minute could be not enough

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  11. Rohanjo29 says

    June 14, 2024 at 9:29 am

    In ref to Example 5 and 6, The non savings taxable income in the ex. 5 did exceed 5000, then why was is that you applied the starting rate to the saving income? I’m still a bit confused about how the starting rate ties into the computation. could you please explain in more detail jill?

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    • kschamoo says

      August 16, 2024 at 11:47 am

      Hello Rohan.

      There is difference between Saving income starting rate band and saving income nil rate band.

      Savings income starting rate band should not exceed first £5,000.00 of the Total Taxable income which is tax at 0%. Ex: If the Taxable income for NSI exceeds £5,000.00 then there won’t be any SI starting rate band but only the SI nil rate band will apply. While the savings income nil rate band is £1,000.00 for basic rate tax payer and £500.00 for higher rate tax payer which are taxable at 0%.

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  12. Looveh11 says

    May 14, 2024 at 11:58 am

    please clarify why we had to add dividend income on to the taxable income. I assumed it was already included

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  13. DreamVille01 says

    April 16, 2024 at 10:17 pm

    No lectures on Annual Allowance and Tapered Annual Allowance???

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  14. scorpion716 says

    April 9, 2024 at 7:26 pm

    Miss Jill thanks for Ur efforts and good explanation this Netting Technique is very very nice and really helpful in AR band questions i mean Ur all techniques are fabulous particularly NETTING one

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  15. alawi sayed says

    March 28, 2024 at 1:29 pm

    Hi,
    Thanks for the clear explanation of Tax subject.

    In example 13

    I want to ask if the saving in self is $4000 so in itself it is low rate but because of the calculating the non-saving it jump in the high rate .
    So is it because of that we have to consider it a high rate .
    So in calculating the income tax it is like accumulating the taxable amounts from the non savings till the dividends column.
    So we don’t have to consider each column of the taxable amount as separate calculation from each other?

    Can you please clarify.

    Thanks

    Thanks,

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  16. peixuni says

    March 24, 2024 at 2:21 pm

    Hi,

    Chapter 2, Part 6, example 8 at 1:40min on the lecture.

    Shouldn’t the £450 “interest from ISA” be included under Savings Income and deducted before reaching to the Taxable Income amount?
    The reasoning is that if we just mark it as exempt but don’t add a figure in front, it would be as if that income stream never existed.
    Would it be wrong if I did this?

    Thank you.

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  17. metania.acc@gmail.com says

    March 10, 2024 at 6:11 pm

    Hi I have a question for part 9 – MCQ1 – about 11’40” in to the video – there is mention of taxable income being £106,800. It doesn’t say trade income, or employment income, but taxable income, which should include the dividends. And yet, when the ANI is calculated, the dividends are added to this taxable income before the gift aid is deducted. This confused me a bit. Am I wrong here? Thank you!

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    • Beezelaberf says

      March 15, 2024 at 8:02 pm

      As they have not said that the taxable income *includes* dividend income, we have added it to the taxable income. I think that’s what it means

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