Income tax computation – part 4 – ACCA Taxation (TX-UK) FA2018
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7 Comments
K
kiki16·
Hello. Concerning the example jointly owned assets David and Elton, why did you deduct personal allowance for David, but not from $ 10000 Elton (50:50 split)? question did state high tax payer but why is personal allowance not deducted from the $ 10000? thanks
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ukadike·
Hi.
I'm a bit confused by the solution to example 14, shouldn't the rate used for the extension of the basic and higher rate bands for the additional rate tax payer be 25% instead?
U
ukadike·
Hi.
I'm a bit confused by the solution to example 14, shouldn't the rate used for the extension of the higher rate band for the additional rate tax payer be 25% instead?
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asifmk3·
Sir, Would you confirm whether there is any minimum cap on joint ownership. Can one partner own less than 5% to be considered joint owner of a property?
S
Shahnawaz·
Ah.. got it. Silly of me to not to notice that it's a Non Savings Income; thus the Nil rate band doesn't apply.
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Shahnawaz·
Hi Sir, can you please look into the following problem, my doubt is that as per your answer in the notes, No Nil rate band of 1000 pounds is taken into consideration for calculating the Tax Liability. Following is my solution while considering the nil rate band. Please clarify.
Regards,
Shahnawaz
Example:11
David and Victoria are married and in 2018/19 David had a trading income
assessment of £8,000 and Victoria received a salary of £30,500.
Calculate the income tax liabilities of David and Victoria assuming that an election is
made to transfer the transferrable amount of David’s personal allowance to Victoria
and state the date by which the election should be made.
David Non Savings Income
Trading Income 8,000
Less: Personal Allowance (8,000)
Taxable Income 0
Transfer of Personal Allowance from David to Victoria = 10%*11850=> 1190
Tax Credit available to Victoria => 20%*1190 238
Victoria Non Savings Income
Salary 30,500
Less: Personal Allowance (11,850)
Taxable Income 18,650
Income Tax Liability Computation:
Non Savings Income:
Nil rate band upto 1000 1,000 @0% 0
Basic rate band upto 34500-1000 17,650 @20% 3,530
18,650
Less Tax Credit (238)
Tax Payable 3,292
The election must be made within 4 years of the end of the tax year; 5 April 2023
A
agnes888·
This "H&W" is a interesting example and help me understand the jointly assets point better, really appreciate. Thank you very much, Sir.
I'm a bit confused by the solution to example 14, shouldn't the rate used for the extension of the basic and higher rate bands for the additional rate tax payer be 25% instead?
I'm a bit confused by the solution to example 14, shouldn't the rate used for the extension of the higher rate band for the additional rate tax payer be 25% instead?
Regards,
Shahnawaz
Example:11
David and Victoria are married and in 2018/19 David had a trading income
assessment of £8,000 and Victoria received a salary of £30,500.
Calculate the income tax liabilities of David and Victoria assuming that an election is
made to transfer the transferrable amount of David’s personal allowance to Victoria
and state the date by which the election should be made.
David Non Savings Income
Trading Income 8,000
Less: Personal Allowance (8,000)
Taxable Income 0
Transfer of Personal Allowance from David to Victoria = 10%*11850=> 1190
Tax Credit available to Victoria => 20%*1190 238
Victoria Non Savings Income
Salary 30,500
Less: Personal Allowance (11,850)
Taxable Income 18,650
Income Tax Liability Computation:
Non Savings Income:
Nil rate band upto 1000 1,000 @0% 0
Basic rate band upto 34500-1000 17,650 @20% 3,530
18,650
Less Tax Credit (238)
Tax Payable 3,292
The election must be made within 4 years of the end of the tax year; 5 April 2023