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James earns an annual salary of 108,000 pounds in 2014/2015. During the year, he received 400 pounds as net interest form his Bank Savings Account, 300 pounds interest from his ISA Account and 720 pounds as dividends. During the year he made a donation of 5,000 pounds under an approved gift scheme.
James is married with two children and pays a mortgage on his house, interest on which amounts to 4800 pounds annually. PAYE of 10,800 pounds was deducted on his salary during the year.
You are required to calculate james’ tax liablity, tax to be paid by him and the date on which he must pay the tax, assuming that he was born after 5 April 1948.
Please work these for me and if possible please show the calculations.Thanks
This is not a capital gains question it is clearly an Income Tax question and if it is from the Becker F6 book then it will have an answer provided – If there is anything in that answer you don’t understand, then AFTER you have worked through the OT Chapter 2 notes and lectures then please get back to me with your specific query though if you have worked through Chapter 2 as suggested you should not have a problem with this exercise.
Sir, I do not have the book. I have tried the question and i have got 21,237 pounds as tax payable. I think the 300 pounds from ISA and 4800 pounds from mortgage will not be utilized in the income tax computation.
Please share your thoughts.
Thanks
You need to only work questions to which you have the answers, the OT examples and practice questions to start with and then you need to purchase a revision / exam kit from one of the approved providers and work those questions!
The interest from his new ISA will indeed be exempt and the mortgage interest paid is not deductible for tax.
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