Hi there, I have a question on BPP 112 about class 2 NICs
calculate simon's income tax liabilities and his class 2 and class 4 national insurance contributions for the tax year 2022/2023,if he is treated as carrying on a trade in respect of the disposal of he freehold house.
I'm not sure why the answer is 3.15*19weeks.
From the question, Simon disposed his freehold house on 27 August 2022, from this date to 5 April 2023 should be 7 months, why the answer is not 3.15* (4*7)weeks instead?
Thank you in advance for your help.
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taxation BPP 112
I am sorry but I do not have the BPP book. There must be some other piece of information either in the question or the answer to help me to advice you
This is the whole information:
On 19 April 2022, Simon purchased a derelict freehold house for £127,000. Legal fees of £1,800 were paid in respect of the purchase.
Simon then renovated the house at a cost of £50,000, with the renovation being completed on 6 August 2022. He immediately put the house up for sale, and it was sold on 27 August2022 for£260,000. Legal fees of £2,600 were paid in respect of the sale.
Simon financed the transaction by a bank loan of £150,000 that was taken out on 19 April 2022 at an annual interest rate of 6%. The bank loan was repaid on28August2022.
Simon had no other income or capital gains for the tax year2022/23except as indicated above.
calculate simon’s income tax liabilities and his class 2 and class 4 national insurance contributions for the tax year 2022/2023,if he is treated as carrying on a trade in respect of the disposal of he freehold house.
Thank you for sending the whole question.
I am confused as I agree with you about class 2 nic
Does the answer give any indication as to why 19 weeks?
Wouldn't it be around 19 weeks from 19th April till the sale of the house? Wouldn't this be the period of self employed trading working on and selling the house?
correct
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