- This topic has 6 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
A has been a sole trader for many years,preparing accounts to 31 mar. each year.
in the yr to 31 mar 2015,A maid profit of £15000 and in the yr to 31 mar 2016 he made loss of £180000.
A has property business income of £260000 in the tax yr 14/15.he has no other income in 15/16.
what is the amount of the loss A can set against his general income for the tax year 14/15?
ans: a.65000 b.50000 c.83750 d.68750my calculation was:
for 14/15:
trading profit+property income
(15000+260000)=275000
loss relief for 14/15:
here,the relief is only available for property income.
as,260000X25%=65000 which is higher than 50000.
65000 will be considered as a relief.
so the total relief is 15000+65000=80000.am I right sir?
The numbers are of course somewhat ridiculous but can you tell me where this example is from and whether the answer given was (c)
yes the answer is (C)
I found it in bpp text.
but don’t understand why the answer is(C)..Because the calculation is 25% of adjusted TOTAL income which will therefore include the trading profit of 15,000 – so the calculation is 25% x 275,000= 68,750 + 15,000 = 83,750
as far I know the cap is not applicable on trading profit.!!!!its only applicable on other income..
- You must be logged in to reply to this topic.