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Hi Henry, it’s also my plan to sit in Dec. Could you explain what you mean by online facilities? Did you buy the books from Kaplan or BPP?
Are you using any sort of lectures during your study?thanks Anna
OK, I will keep trying, but may I just check. Is the ATX forum open for question? thx
Thank you I thning got it now, in simple terms the first interest he receives in not for full 6 months, because the sell has happend on 1 June 2019, hence the 2/12 on the interest has been already taxed on the seller side, and he only gets the 4 months worth of the interest on 30 Sep 20.
so much struggle for just two point questions 🙂
I have Kaplan revision book, and it clearly says residential:
” A residential property valued at £ 970,000…..”may be there is an error in your revision kit…
thank you for comming back to me.
I have certenly review the notes before I’ve asked the question, and I understand the concept that when the sale is made the seller has to pay the tax on “hidden” interest. However, I struggle to understand why the seller has to also deduct the interest occurred prior to purchase. I am afraid this was not in the notes.
Could you please shed some light on it? There must be something we are not seeing here
Thank you so much in advance.
Please as a reference point here is the question 12 and 14 (so you do not have to scroll up)
———————————————————————————————————————–
Q 14” Ahmed purchased £ 10,000 (nominal) gilt, paying interest 2% , for £11,000 on 1 June 2019. Interest payble on 31 March and 30 September.
He sold the gilts on 29 Feb 2020 for £ 11,400 (including accrued interest). How much will Ahmed include in saving income in tax year 19/20/Soulution form Kaplan:
Interest rec. (10,000 *2% *6/12) = 100
less: Interest occurred prior to purchase (1 April to 31 May 2019) (£ 10,000*2%*2/12) = (33)
Interest accrue: 1 Oct 19 to 29 Feb 20) £83Total int, income: £150
——————————————————————————————————————————Q12
Matthew purchased (nominal value) gilt, paying interest at 1% for £211,000 on 1 Sep 2018. Interest is payable half yearly on 30 June and 31 December. He sold gilts on 2019 for £ 2013,000 (including accrued interest).
Solution per Kaplan:*
Interest received 30 June 2019 (200,000*1%*6/12) = 1000
Interest accrued 1 July 2019 to 30 November 2019 200,000 * 1%*5/12) = 833Total interest income: £1,833
I
heya,
Yes there will be charge on £13,000 at the higher rate .
“And also if you could mention whether employer’s contrns into an individual’s personal pension scheme lead to the individual’s Basic rate band getting extended?” I would say no.
heya, I think i can help here.
Interest relief is only on buy to let property, generally when you take out a buy to let mortgage you have a different terms, for instance interest is higher.
It may be a bit different story, when for instance, you planning to extend your house in purpose of letting only, in that case I could think the relief is available, But our kind tutor can confirm 🙂
Hi Agness,
Can I input here.Is the answer to the question £ 1,833?
If so you calculate as below:
Interest actually rec’d:
1st time 30 June 2019 (200,000 x 1% x 6/12)= 1000
2n time when he sold the gilt the interest for 5 months was included in the sale price.
In the old times, it was the clever way to avoid taxation, HRMC was a bit “blind” until they figured out, that there is a interest hidden in capital gain (which is btw tax free in this case). any how you calc the interest 200,000 x1%x 5/12 = 833
in total = 1,833hi Sir, Please ingore my message I have worked out that you ca used both methods, and each is as good. thank you
Hi, May also add the question to the other wasting chatles please.
I am confused by the approaches in calculation of allowable cost for eg copyrights. I have compare Open Tuiton approach with the Kaplan Text book (page 625, chapter 20). Simlar question but the allowable cost is calculated in two different way which gives the different answer:
– In your notes the is the reduction in original cost by P/Lx (C-S)
– in the Kaplan text book the formula is different; allowable cost = original cost x Remining life at disposal/ estimated useful lifePlease, please could let us know why there is a difference and which way is right way?
many thanks AnnaMany thanks for your response.
I was thinking in a scenario whereby students like us have to pay themselves for annual ACCA subscription and an exam fee, including the study materials. I have looked onto the study text and also onto the HRMC website, and yes the annual fees are allowable, but I am not certain about the exam fee. Are the exam fees and associated costs allowable for deduction in individual income tax computation, if paid by a student?
I think this could be a very interesting exam question:)
many thanks in advance
o dear, I am being silly, there is headings $000….gosh such annoying mistake when you are in the rash. I am sorry John for wasting you time 🙁
yes, indeed the high low method. The Kaplan answer is confusing though. They answer is:
VC per unit: (7000-5446) x 1000/(9400-7300). And all makes sense, except for multiplying the cost by 1000. where this 1000 came from?
many thanks
it’s a question 250 but from Kaplan kit. I will take me a few min to type in.
“HS manufactures components for use in computers, The business operates inn highly competitive market. where there are a large number of manufactures of similar components. The Managing Director seeks your advise to determine the selling price that will maximize the profit to be made during this period;
Date given:
MARKET Demand:The current selling price is $ 1350 and at this price the average weekly demand over lat four weeks has been 8,000 components. An analysis for the market show that for every $50 increase in price demand will falls by 1000 components per week. Equally for every $50 reduction in selling price, the demand will increase by 1,000 components per week.
Cost:
Direct materials is $270. The price is part of a fixed price contract with the material suppliers and the contract does not expire for another year.Production labour and conversion costs, together with other overheads cost and the corresponding output volumes, have been collected for the last four week and there are a follows:
Week Volume Cost
1 9,400 7,000
2 7,600 5,688
3 8,500 6,334
4 7,300 5,446No significant changes in cost behavior are expected over next 12 weeks.
REQUIREMENT;
Calc optimum selling price of the component for the period.My question is how would you calc Variable costs? many hanks Anna
yes, I must mistaken with my assumption. I get that.
The part I struggle with is why do I need to calculate the time for 29 batches and then subtract 13 batches, rather that just directly calculate the time or 16 batches, using formula. Is the formula Y=axb calculates the average time per outcome? Once I calculate the average time to produce 16 batches I should be able to calculate the total time by simply multiply this by number of batches.
?many thanks Anna
Hi John,
may I just ask why the actual sales x (actual selling price less standard cost)) rather than actual selling price less actual cost? Hence we using the actual price,I am trying to understand the logic behind it. many thanks Anna
