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Trading Loss

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Trading Loss

  • This topic has 3 replies, 2 voices, and was last updated 8 months ago by Tax Tutor.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 18, 2022 at 10:30 pm #655999
    maddi93
    Member
    • Topics: 5
    • Replies: 5
    • ☆

    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 £1,000

    The answer is £13,000, I assumed it would be £4,000.

    May 19, 2022 at 3:18 pm #656035
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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!!

    May 21, 2022 at 7:39 pm #656142
    maddi93
    Member
    • Topics: 5
    • Replies: 5
    • ☆

    Sorry, the question was ‘What is Brookes’ net income for the tax year 21/22 assuming she carries the trading loss forward?’

    May 27, 2022 at 11:54 am #656628
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    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?

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