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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Query on savings income exempt from income tax
Q Said is a professional translator and has made the following investments during the tax year 2014/15.
i) GBP 400 in shares in the company he works for
ii) GBP1000 in a New Individual Savings Account
iii) GBP800 in National Savings & Investments Investment account
iv) GBP 500 purchasing a National Savings & Investment Certificate
Which of the above investments will generate income which is exempt from income tax for the year 2014/15?
A) All of the above
B) i, ii and iv only
C) ii iii and iv only
D) i only
Answer by Kaplan:
B.
Income generated from a New Individual Savings Account and a National Savings & Investments Certificate is exempt from Income Tax.
Options A, C & D are incorrect because income generated from shares (dividends) and from NS&I investment account is subject to income tax.
Question to tutor:
So why is (i) included in the answer? Shares in company he works for generates dividends and this is subject to income tax.
Clearly only options (ii) and (iv) are exempt. Presumably option B in the question should have simply said those 2 options and not included (i)
