- This topic has 1 reply, 2 voices, and was last updated 7 years ago by
.
- Posts
Hi sir, in chapter 6 examples 2&3, how did we get the overlap profits? i dont get how we get it. i tried adding the actual profits then deducting the assessed profits but it’s giving me different overlap profits. could you please explain how we get overlap profits using the other method (like 5/18×36000 = 10000)
Look at the basis periods given in the answer for each tax year – the dates are clearly stated, and then look at what periods fall into the basis periods for two tax years – again these dates of the overlap periods are clearly given – in example 3 it is the period from 1/11/15 to 5/4/16 which falls into the basis periods for both 15/16 and 16/17.
The alternative way is that 2 figures of profit (36,000 + 30,000 = 66,000) have been used to determine the assessments in the first 3 tax years, where the assessments are 22,000 + 24,000 + 30,000 = 76,000. Therefore 76,000 – 66,000 = 10,000
- You must be logged in to reply to this topic.