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maddi93
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Hello,
Please could you tell me why the trading loss wasn’t used against the dividend income in the below question? I assumed trading loss could be used against the following in the order of 1)non-savings income 2) savings income and 3) dividend income.
Brooke has been trading profitably as a sole trader for many years. However, in the year ended 31 August 2020 she made a trading loss of £65,000.
Brooke has the following income in the tax year 2021/22:Trading profit for year ended 31 August 2021 £12,000
Dividend income (gross) £9,000
Property income (furnished holiday accommodation) £4,000
NS&I savings certificate interest £1,000The answer is £13,000, I assumed it would be £4,000.
Tax Tutor
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You have not told me all of the information in the question nor most importantly the requirement of the question – but from what you have told me then do please remember what income a loss carried forward is set off against!!
maddi93
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Sorry, the question was ‘What is Brookes’ net income for the tax year 21/22 assuming she carries the trading loss forward?’
Tax Tutor
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Then as I said above – remember what a trading loss CARRIED FORWARD may only be set off against – have you worked through the relevant lectures and study notes provided?
maddi93
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