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Transferable Amount of Personal Allowance

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Transferable Amount of Personal Allowance

  • This topic has 4 replies, 2 voices, and was last updated 7 years ago by nitint.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • November 4, 2017 at 6:25 am #414262
    nitint
    Participant
    • Topics: 25
    • Replies: 26
    • ☆☆

    Dear Sir,

    Is my understanding correct that 10% of the PA is a fixed amount and not the maximum amount?

    For example 11 of Chapter 2 if we assume for a moment that David had a trading income of £10,000 (instead of £8,000 in the notes) and Victoria received a salary of £30,000.

    In this case is it possible for David to transfer the unused PA of £1000 to Victoria or the question of transfer will only arise when the unused PA is greater than or equal to £1100?

    Many thanks Sir.

    Regards,
    Nitin

    November 5, 2017 at 11:17 am #414409
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    The election is for the fixed amount of 10% – hence 1100 – irrespective of the unused amount!

    November 9, 2017 at 9:41 am #414964
    nitint
    Participant
    • Topics: 25
    • Replies: 26
    • ☆☆

    Are you saying if David had a trading income of £10,000 and Victoria received a salary of £30,000, David can still transfer 1100 of his PA to Victoria?

    This would mean that both the partners together will benefit from 22100 PA instead of 22000.

    November 11, 2017 at 2:43 pm #415266
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    No it would not – look back at the answer to the example and you will see that David will get a PA of 9,900 so will have taxable income of 100 – also note we do not transfer the unused PA – we transfer a tax deduction of 220

    November 12, 2017 at 8:52 am #415335
    nitint
    Participant
    • Topics: 25
    • Replies: 26
    • ☆☆

    Thank you Sir. I now understand what I was missing. You have made it so easy to understand the topics for an overseas student like myself.

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