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Hi tutor.
I am working back through the examples, in chapter 7 example 4.
I understand the questions and answer except I don’t know why we don’t have an overlap for the 8000 we used from the 17/18 profit of 48000.ANSWER TO EXAMPLE 4
Trading income assessable amounts:
Assessment Loss
2015/16 (Actual basis)
1/8/15 – 5/4/16 (8?10 × (20,000)) Nil (£16,000)
2016/17 (First 12 months)
1/8/15 – 31/7/16
Loss to 31/5/16 (20,000)
Less: Used in 2015/16 16,000 ————I get this isn’t overlap as we subtract the loss.
(4,000)
Profits 2/12 × 48,000 8,000 —————– we have included this in both years so why isn’t it an overlap.
4,000
2017/18 (CYB)
A/C year ended 31/5/17 48,000thank you so much for your lecture and notes I have found them really good.
leanne
You are perfectly right there is indeed an overlap profit of 8,000 and for next year’s course notes I will put in an additional note to make that point!
It wasn’t included as part of the answer, however, simply because the question only asked for the trading profit assessments and the losses available for relief to be computed.
The answer however would be improved by a note to that effect!!
Many thanks
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