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no it is not that i have not listened to your lectures but sometimes i forget certain things and need to ask again when i start doing the exam kit. sorry. but yes it is not expected for you to type the lecture out again here… understood the annuity value now though. thank you!
which lecture is it could you please say? i must have listened to it but glossed over the part sorry…
Thank you so much!! You can explain it really well and I have understood the logic now.
failed . third attempt. feeling so hopeless now. thinking of dropping acca altogether.
failed with 45. was second attempt. thinking of qutting acca now. keep on failing every paper when my peers pass dont know whats going wrong. feeling so hopeless.
another question is what is to be included in an Other Matter paragraph? Someone I asked said an EOM and Other Matter paragraph are the same thing but the article has different definitions on them…
@sapphire16 said:
Hi gothrogue,The study text confirms that for relevant earnings, it will include taxable trading profits, employment income and furnished holiday lettings but not investment income. Things which aren’t included will be income like dividend income, or property income.
With property income, the only way it is included as relevant earnings, is if it meets the criteria for a commercially let Furnished Holiday Letting (FHA).
If it does qualify as an FHA, it remains assessable as property income, but the profits are treated as arising from a seperate trade, and is calculated seperately from other rental properties. Another advantage is that it will be treated as relevant earnings, unlike the income from other properties.
Chloe will only receive tax relief on contributions, which are the the lower of:
(1) Total gross pension contributions paid (for Chloe this is £8,200)
(2) Maximum annual amount**The maximum annual amount is the higher of:
– £3,600
– 100% of the individual’s ‘relevant earnings’, chargeable to income tax in the tax year.I see from the question that Chloe doesn’t have any other income (therefore no income for relevant earnings) so 100% of her relevant earnings is 0. The figure of £3,600 is higher than this, so £3,600 is used.
Comparing (1) £8,200 to (2) £3,600, Chloe can only claim relief on the lower of this, so she can only claim for £3,600.
£3,600 is not what she paid net of tax. £3,600 is what she can claim tax relief for, after making a contribution of £8,200, and then assessing her maximum relied using the above rules.
The textbook mentions that basic rate tax relief is automatically given by deduction at source when contributions are paid, as an individual makes contributions net of the basic rate of income tax (20%)
HMRC pay the 20% tax relief to the personal pension scheme.
I hope this has helped you a bit 🙂
Omg thank you so much for taking the time to explain it thoroughly! You wrote out quite a bit sorry. But yes it has clarified some muddled bits up. 🙂
Oh thanks a bunch! I understand it much better now.
Sorry for posting in the wrong section. I was typing it on phone and didn’t realise it.Oh wow. I was under the wrong theory all this time 🙁 so his unused nrb percentage transfers over to when his spouse dies irrelevant of what his rate was.
Thank you so much for clearing it up with an example that’s easy to understand!
Hope you have a good day 🙂Mines not the updated version? Nòoo.
Oh good to know that that’s the answer. And yes then this version has a misprint.
Thank you! 🙂@johnmoffat said:
Before I answer, two things 🙂Firstly, although I appreciate your thought in putting two questions together, please in future create separate threads. (It is so that other students can see the heading and can more easily benefit from the answers)
Secondly, have you actually watched my free lectures (because both these points are dealt with in the lectures and I obviously cannot type out all the lectures here!)?
1. It won’t necessarily mean an adverse yield variance, but it certainly could do. A favourable mix variance always means they used more of the cheaper material (and less of the expensive), and this is therefore likely to lead to more wastage.
2. There is only an opportunity cost if sales externally are being lost. If they have spare capacity then they can still supply externally and therefore they will not lose any external sales. (For a fuller explanation, with examples, then again you need to watch the lecture)
Oh ok thank you. I’ll keep it in mind to make separate threads in the future.
I did go through all the lectures but it was some time ago.. So I did the Transfer Pricing examples again. Everything is clear except that last bit from example 8. Where the lost contribution is 10 hours of the labour time x $4..
But isn’t $3 dollars the contribution for product Y…
