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Accrued income scheme

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Accrued income scheme

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by Tax Tutor.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 17, 2021 at 7:13 am #617952
    naveed42927
    Member
    • Topics: 5
    • Replies: 0
    • ☆

    Dear sir,
    I have a question regarding accrued income scheme. I was attempting Kaplan Taxation study text, illustration # 7 in which there is mention calculate interest income for 20/21. Below i have exactly typed the question as it is in book.
    My problem is that why they have included in first part of question all the 6 moths i.e., from jan to june. But tax year runs from april i.e., there should have been 3 months.
    I would be very thankful if you solve my this problem.
    Thank you
    Naveed khan

    Ahmed sold £15,000 6% loan stock cum interest on 31 October 2020 for proceeds
    of £20,000. He originally acquired the loan stock on 1 May 2018. Interest is
    payable on 30 June and 31 December each year.
    Calculate the amount assessed on Ahmed as interest income for 2020/21.

    Solution
    Interest income – 2020/21

    Interest received – 30 june 2020
    (15000*6%*6/12) = 450

    Accrued income included in selling price of loan stock
    ( from 1 july 2020 – 31 October 2020 15000*6%*4/12) 300

    Total interest assessable to tax = 750

    April 19, 2021 at 9:11 am #618181
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    The basis of assessment for interest (savings) income is actual amounts RECEIVED not accrued.
    The accrued income scheme is a separate issue which is dealt with in the OT study notes and lectures in chapter 2 – have you worked through these notes and lectures?

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