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Hello… I have just started studying F6 and i am doing the practice question number 2.
I have a problem with the tax calculation. Until the taxable income part, everything is fine.
I got the taxable income as follows: NS 34095, S 3500, D 2000, TOTAL 39595For the tax calculation, from what i have understood, please correct me,
NS = 20% x 32010 + 40% x (34095 – 32010) = 7236
S = 20% x 3500 = 700
D = 32.5% x 2000 = 650I really don’t understand from where the numbers come from in the PRACTICE ANSWERS.
Also, Can you please explain to me why for the dividend should we multiply by 32.5% when the dividend income falls between the basic rate of 1-32010 ??? Why do we take the higher rate for a dividend income of 2000???Thank you for clearing up these doubts.
I assumed so! You should not attempt the practice questions until you have completed the relevant chapters! You should work through the individual chapters first attempting each example within the chapter and preferably in conjunction with the lectures. Only when this has been completed should you then attempt the practice questions.
As the old saying goes – “you must learn to walk before you can run”!
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