[karen]

Hi Dave,

I just take a look at the illustration following the link. It seems the answer treated the dividend part all at 10% which actually 3744 is above BRB.

I agreed with your thought but we need someone who is more professional to correct us if it is wrong. Because it is the example in the published article which is should not be wrong.

If it is wrong answer and we followed by the way to use the same technique on exam. Who is going to judge this? We will never know why we failed.

Hope someone can answer it. Good luck any way. The exam won’t be that easy!

Finger crossed.
Karen

[karen]

Hi Dave,

Based on the information you given above, I have worked out as follows:

NSI- employment income £36,000
DI- dividend income £7,000 which have to gross up by 100/90 for tax purpose is £7,778

Tax computation:

NSI 36,000-9,440 = 26,560 @ 20% =5,312
DI. 32,010-26,560=5,450 @ 10%= 545
———
32,010
7,778-5,450= 2,328 @ 32.5%= 757
——–
6,614
Dividend tax credit 7,778@10% = (778)
——–
Tax liability 5,836

The information given is limited and I only worked out based on. It will be helpful for us to answer your question if you can reference the question no. or give us more detailed information.

Hope these will give you a little help.
Karen

[karen]

Hi Dorian,

Thank you very much!

It is a clear answer and I finally found the rules regarding capital goods scheme.

Good luck on your exams and every success!

Karen

[Author]

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