[Solution]Income tax assessment

Practical Questions Question 1: Bill was born in 1978 .He is married to Hazel who was born in 1982. In 2019-20, Bill had business profits…

Practical Questions

Question 1:

Bill was born in 1978 .He is married to Hazel who was born in 1982. In 2019-20, Bill had business profits of £47,550 and received dividends of £5,200. Hazel received a salary of £220,570 and bank interest of £3,040.

Calculate their income tax liabilities for the year.

Question 2:

Toby is a widower. He was born in August 1933.His wife was born in June 1934 but she died in March 2019.Toby’s income for 2019-20 is as follows:

Retirement pension                                                            £11,480

Income from purchased life annuity (net)                              £912

Calculate the amount of income tax repayable to Toby for 2019-20.

Question 3:

Brian and Carole are a married couple. Brian was born in 1976 and Carole was born in 1974. They both claim the basic personal allowance for 2019-20 .Brian’s total income for 2019-20 is £30,000 and Carole’s total income for the year is £10,000.None of their income is derived from savings or dividends.

Calculate the couple’s combined tax liability if Carole does not make an election to transfer part of her personal allowance to Brian.Calculate the couple’s combined tax liability if Carole does make the election.How would the situation change if Brian’s total income was £60,000?

Question 4:

Matthew’s income for 2019-20 consists of a salary of £114,600 and dividends received of £4,400 .He makes qualifying Gift Aid donations of £7,200 during the year. Show Matthew’s 2019-20 income tax computation.

Question 5:

Melissa owns a house which she lets to tenants. The house was let throughout tax year 2019-20 at a rent of £600 per month. Her allowable expenditure in 2019-20 was £900 and she had property losses brought forward from 2018-19 of £6,550 .her other income in 2017-18 was as follows:

                                                     £

Retirement pension                 16,980

Building society interest            1,730

Compute the income tax payable by Melissa for the year.

Question 6:

In 2019-20, Peter is granted a 12-year lease on a property, paying a premium of £40,000 to his landlord .He immediately grants a 4-year sub-lease to Paula, receiving a premium of £14,000.

Calculate the income tax assessment on the premium received by Peter.
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