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Dividends received
18,000
6,300
9,000Franked investment income is £30,000
why ????
ok
I found the answer to my question in the answer (obviously)
however – same question
Premium received 90,000
Less: 90,000 x 2% x (10 – 1) (16,200)What is this calculation based on
Hi Matthew
You are of course referring to the real exam in June 2012 where a company has paid a premium on the granting of a short lease and we need to calculate the allowable trading profit deduction in respect of the premium paid. If not already please review the OT course notes, chapter 3 , sections 5.1 and 5.2. The annual trading profit deduction permitted to the payer of the premium is computed as:
Property Income assessment on landlord divided by the number of years of the lease
An alternative way of computing the property income assessment on the landlord is to take the premium received and deduct 2% for the number of years of the lease minus one, hence:
Premium rec’d 90,000
Less: 2% x (10 – 1) x 90,000 = (16,200)
73,800
The same result can be directly computed by the method shown in section 5.1
90,000 x (51 – 10) / 50 = 73,800
Hope this helps
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