ITB 1
Tony is a sole trader and has taxable trading profits of £190,000 for the tax year 2020/21.
In the tax year 2020/21, Tony also received the following amounts of other income. The amounts shown were received or credited to Tony’s accounts:
£
Dividends from shares in UK companies 6,000
Interest from an individual savings account (ISA) 760
Building society interest 4,500
Gross rent from unfurnished property investments 8,000
In the tax year, 2020/21 Tony paid mortgage interest of £3,100 in respect of the purchase of the unfurnished property investment.
Tony made a donation of £960 to a national charity under the gift aid scheme.
REQUIRED
Calculate the income tax payable by Tony for 2020/21
ITB 2
Income for the tax year 2020/21 is as follows
£
Taxable trading income 20,000
Taxable income from property 3,000
UK dividends received 150,000
REQUIRED
Compute the income tax payable by Peter, assuming that he is entitled to the basic personal allowance and that he donated £4,000 to Oxfam (a registered charity)
ITB 3
Veronica (a full time Mum) receives child benefit of £1,403 in the tax year 2020/21. Her husband Danny has adjusted net income of £63,000 in the tax year 2020/21. How much child benefit income tax charge will Danny have to pay?
Benny (a full time Dad) receives child benefit of £1,210, in the tax year 2020/21. His girlfriend Raelene who lives with Benny has adjusted net income of £54,730 in the tax year 2020/21. How much child benefit income tax charge will Raelene have to pay?
ITB 4
Freddie has employment income of £28,000. His wife Janet does not work. What should Janet and Freddie do to minimise their tax liability and what will be the outcome?
ITB 5
Ted, aged 51, took early retirement from his position as a sales manager with Plath Limited on the 5th April 2021 after 20 years employment.
Ted’s income and outgoings for the year ended 5th April 2021 were:
A salary from Plath Limited of £4,000 per month gross. He was on a bonus for hitting sales targets. On 5 March 2020, he received a bonus of £2,000 and on 5 March 2021, he received a bonus of £2,500.
From 6th April 2020 to 5th April 2021, he had the use of a company flat bought by the company for £125,000 in September 2017. The annual value of the flat was £5,000. The company furnished the flat at a cost of £14,000. The accommodation was not job-related.
In 2016, Plath Limited lent Ted a computer costing £4,000 for use in his home, which he used for both business and private purposes. He was required to hand back his computer when he retired on the 5th April 2021.
In 2010, Plath Limited lent Ted £16,600 interest free to buy a yacht. This loan was paid back on retirement.
Ted was provided with a company car throughout the year; the list price when first registered was £20,000. The company paid for all running expenses including petrol. Ted made a contribution of £20 per month towards the cost of the petrol, which covered about half the cost of the private mileage. The car emitted 137 gm/Km of CO2.
His only other outgoing was a £200 subscription to the Institute of Sales Executives.
On 31st December 2020, he received dividend income from a UK company of £6,350 and on 1st March 2020, he received bank interest of £1,500 (net).
Ted let out a furnished property throughout 2020/21 – he received gross rents of £12,000 15% of which was paid to a letting agency.
REQUIRED
Calculate the income tax payable by Ted for 2020/21.
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