Questions and Answers of Taxation of Individuals

Timberlake Ltd prepares accounts to 31 March each year. The company made the following disposals of chargeable assets in the year to 31 March 2021:(i) In February 2021, a rare Bentley motor car used
A company has taxable total profits of £5,000,000 for an accounting period. Explain how the corporation tax liability for this period will be calculated if:(a) the accounting period is the 12 months
Calculate the corporation tax liability of each of the following companies for the accounting period concerned:(a) A01 Ltd has taxable total profits of £800,000 for the year to 31 March 2021.(b) A02
(a) A company prepares a set of accounts for the year to 31 July 2020. When is the corporation tax liability for this period due for payment?(b) A company prepares a set of accounts for the 18 months
A large company has a corporation tax liability of £720,000 for an accounting period. State the dates on which instalments are payable and compute the amount of each instalment if the accounting
(a) A company calculates its corporation tax liability for the year to 30 September 2020 as £250,000 and pays this amount on the due date. The correct liability for the year eventually turns out to
A company prepares accounts to 31 July each year. It calculates its corporation tax liability for the year to 31 July 2019 at £180,000 and pays this sum on 1 May 2020. The company is not large for
A company's taxable total profits for an accounting period are £3,200,000. Compute the corporation tax liability if the accounting period is:(a) the year to 31 March 2021 (b) the year to 31 December
State the date (or dates) on which corporation tax is due for payment in relation to the following periods of account:(a) the year to 31 March 2021 (b) the six months to 30 November 2020(c) the 21
(a) ABC Ltd has taxable total profits of £1,800,000 for the year to 31 March 2021.Taxable total profits were £1,600,000 for the year to 31 March 2020.Calculate the company's corporation tax
A company (which is not a member of a group) prepares a set of accounts for the year to 30 September 2020. Calculate the corporation tax liability for the year and state the date(or dates) on which
A company calculates its corporation tax liability for the year to 31 August 2019 as £120,000 and pays this amount on 1 June 2020. The company's corporation tax return is submitted during August
State the date (or dates) on which a "large" company would be required to settle its corporation tax liability for each of the following accounting periods:(a) the eleven months to 31 May 2020 (b)
A company (which is not a member of a group) has the following results for the year to 31 March 2021:The company intends to make Gift Aid donations of £30,000 every six months, starting on 30
A company (which is not a member of a group) has the following results for the 14 months to 31 December 2020:Accrued building society interest was £3,000 on 31 October 2019, £4,000 on 31 October
In the year to 31 March 2019, a company incurred a trading loss of £270,000 which was carried forward. The company's results for the next two years were:(a) Compute the company's taxable total
A company has the following results for the three years to 31 March 2021:Assuming that the trading loss of £78,900 is carried forward and that maximum loss relief is taken as soon as possible,
A company has the following results for the year to 31 December 2020:Assuming that a claim is made for the trading loss to be relieved against total profits, compute the company's taxable total
A company has the following results for the three years to 31 October 2020:Assuming that all possible claims are made to relieve the trading loss against total profits, calculate the company's
A company has the following results for the three accounting periods to 31 March 2021:Assuming that all possible claims are made to relieve the trading loss against total profits, calculate the
A company which began trading on 1 April 2018 has no other income apart from its trading profits. Results for the first three accounting periods were as follows:All possible claims were made to set
A company has the following results for the three years to 31 March 2021:Assuming that the trading loss is carried forward and that maximum loss relief is taken as soon as possible, calculate the
A company has the following results for the year to 31 October 2020:Assuming that a claim is made to relieve the trading loss against total profits of the lossmaking accounting period, calculate the
A company's taxable total profits for the year to 30 June 2020 are £800,000. In the nine months to 31 March 2021, the company incurs a trading loss of £700,000 and has no other income or gains.
A company has the following results for the four years to 31 March 2021:Calculate the total repayment of corporation tax (with interest) to which the company is entitled, assuming that:(a) all
Throughout tax year 2020-21, a close company provides one of its shareholders (not a director or employee) with a motor car for private use. The company's accounts for the year to 31 March 2021 show
On 1 May 2019, a close company which prepares accounts to 31 March each year lends £30,000 to Ravi, who is one of its directors. No interest is charged on this loan. Ravi owns 18% of the company's
A close company which prepares accounts to 31 March each year is owned and managed by a single shareholder/director who is not a Scottish taxpayer and who is paid a salary of £5,000 per month. In
On 31 October 2020, a close company which prepares accounts to 31 March each year provides one of its full-time working directors with:(a) an interest-free loan of £12,000 (the company does not
On 19 April 2019, a close company (which makes up accounts to 31 March annually) lends £100,000 to Siobhan, who is a director of the company and who owns 30% of its ordinary share capital. The
Glenda has been self-employed for many years and prepares accounts to 31 March each year. Her adjusted profits (after deduction of capital allowances) are currently running at approximately £80,000
E Ltd has taxable total profits of £800,000 for the year to 31 March 2021 and receives no dividends. For many years, the company has owned 65% of the ordinary shares of F Ltd and 30% of the ordinary
S Ltd has taxable total profits of £120,000 for the six months to 30 September 2020 and receives no dividends. Until 1 June 2019, S Ltd had no related 51% group companies. However, on that date, its
A company which has seven 51% subsidiaries has taxable total profits of £140,000 for the year to 31 May 2020. Dividends received in the year were £50,000. Calculate the corporation tax liability
Low1 Ltd is a wholly-owned subsidiary of High1 Ltd. Both companies are UK resident and prepare accounts to 31 March each year. Results for the year to 31 March 2021 are:Show how the trading loss
S1 Ltd and S2 Ltd belong to the same capital gains group. In May 2017, S1 Ltd transferred a chargeable asset to S2 Ltd. The original cost of this asset to S1 Ltd was £10,000 and its market value in
The ordinary share capital of W Ltd (which is a trading company) is owned 30% by X Ltd, 25% by Y Ltd and 45% by Z Ltd. All of these companies are UK resident and they prepare accounts to 31 March.
U Ltd has three subsidiaries (one of which is dormant) and has the following results for the year to 31 December 2020:Compute the corporation tax liability for the year and state the date (or dates)
Basenote Ltd is a wholly-owned subsidiary of Apexine Ltd. Both companies are UK resident and prepare accounts to 31 March each year. Results for the year to 31 March 2021 are as follows:Calculate the
The ordinary share capital of PP Ltd (a trading company) is owned 32% by QQ Ltd, 35% by RR Ltd and 23% by SS Ltd. The remaining 10% is owned by various individuals, none of whom own more than 1%. All
(a) Compute the primary Class 1 NICs payable by the following weekly-paid employees for the week ending 14 August 2020:(i) Employee A has earnings for the week of £110.(ii) Employee B has earnings
Compute the secondary Class 1 NICs payable in relation to each employee in Example 1. Assume in each case that the employee concerned is over 21 and is not an apprentice.Data from Example 1(a)
During 2020-21, an employee earns £5,000 per month.(a) Calculate the total primary Class 1 NICs payable for the year.(b) What would the total primary contributions be for the year if the employee
Rework the previous example, given that the employee in question is a company director.Data from Previous ExampleDuring 2020-21, an employee earns £5,000 per month.Calculate the total primary Class
In 2020-21, George is provided with a petrol-engined motor car by his employer who pays for all fuel and other running costs. The car was registered in March 2020 and had a list price when new of
(a) Alison has been self-employed for many years. Her profit for tax year 2020-21 is £6,380. Is she liable to pay Class 2 NICs for the year?(b) Amanda starts a business on 25 May 2020 and she is
Calculate the Class 4 NICs payable in each of the following cases:(a) Shawn has trading income for 2020-21 of £16,140.(b) Catherine has trading income for 2020-21 of £55,000.(c) Paul has trading
(a) Sabrina has two employments throughout 2020-21. Calculate the refund of NICs due for the year if her regular monthly earnings from the two employments are:(i) £940 and £1,340 (ii) £2,600 and
Calculate the 2020-21 income tax liability of a non-Scottish taxpayer with taxable income (i.e. income remaining after deducting any available personal allowance) of:(a) £11,730(b) £14,743(c)
Calculate the personal savings allowance available in 2020-21 to a taxpayer with taxable income for the year (i.e. net income less any available personal allowance) of:(a) £20,000(b) £37,501(c)
In 2020-21, Robert (who is not a Scottish taxpayer) has business profits of £40,000 and receives bank interest of £1,250. His personal allowance is £12,500. Calculate Robert's income tax liability
In 2020-21, Roberta (who is not a Scottish taxpayer) has rental income of £16,700 and receives building society interest of £1,100. Her personal allowance is £12,500. Calculate the income tax
In 2020-21, Kenneth (who is not a Scottish taxpayer) has business profits of £58,850 and bank interest of £980. His personal allowance for the year is £12,500. He makes no Gift Aid donations or
In 2020-21, Philip (who is not a Scottish taxpayer) has business profits of £240,235 and building society interest of £1,600. His personal allowance for the year is zero. He makes no Gift Aid
In 2020-21, Philippa has business profits of £10,000. She also receives bank interest of £3,380 and net loan interest of £36,680. Her personal allowance is £12,500 and she makes no Gift Aid
In 2020-21, Christopher (who is not a Scottish taxpayer) has rental income of £28,590. He also has bank interest of £1,050 and dividends of £204,100. His personal allowance for the year is zero
In 2020-21, Charlie (who is not a Scottish taxpayer) receives a pension of £17,750, bank interest of £195 and dividends of £1,600. His personal allowance is £12,500. Calculate his income tax
In 2020-21, Sue (who is not a Scottish taxpayer) has business profits of £48,650 and bank interest of £2,000. Her personal allowance for the year is £12,500 and she makes no Gift Aid donations or
Calculate the income tax liability for 2020-21 of a non-Scottish taxpayer with a taxable income (after deducting any available personal allowance) of:(a) £1,830 (b) £32,300 (c) £71,833 (d)
Calculate the 2020-21 income tax liability of a non-Scottish taxpayer with income for the year as follows:(a) Business profits of £28,105 and bank interest of £720.(b) Business profits £50,150,
Stephanie (who is not a Scottish taxpayer) has the following income in 2020-21:Compute Stephanie's income tax liability for the year, assuming that the rents received are not within the "rent-a-room"
Ernest (who is not a Scottish taxpayer) has a retirement pension in 2020-21 of £56,890 and bank interest of £620. His personal allowance for the year is £12,500. Compute Ernest's income tax
Ivan (who is not a Scottish taxpayer) has the following income for tax year 2020-21:His personal allowance for 2020-21 is £12,500. Compute the income tax payable by Ivan for the year. How would this
Mary's income for tax year 2020-21 consists of business profits of £26,920, dividends received of £124,460 and rents received of £3,750. She is not a Scottish taxpayer and her personal allowance
Ben (who is not a Scottish taxpayer) has business profits of £110,520 in 2020-21. He has no other income and makes no Gift Aid donations or pension contributions. Calculate the amount of his 2020-21
In 2020-21, a husband has a pension of £11,290 and his wife has a pension of £20,000. They have no other income and they are not Scottish taxpayers. Calculate the combined tax liability of the
Calculate the MCA available for 2020-21 in the following situations:In each case, MCA is claimed and the stated income figure is the adjusted net income. All of the couples were married before 5
Calculate the MCA available in 2020-21 to a husband and wife (both born in August 1934) who each have an adjusted net income not exceeding £30,200 and who marry on:(a) 23 June 2020(b) 4 April 2021
Calculate the income tax liability for 2020-21 of a husband and wife (both born in March 1935) given the information shown below. In each case, an election has been made for 50% of the tax reduction
Calculate the basic personal allowance available in 2020-21 to a taxpayer with adjusted net income of:(a) £90,000 (b) £108,000 (c) £140,000.
Pamela's salary in 2020-21 is £105,000. She has no other income.(a) Calculate her income tax liability for 2020-21.(b) Re-calculate her income tax liability as it would have been if her salary for
Calculate the married couple's allowance available to the following couples in 2020-21, assuming that they were married before 5 December 2005 and that they have not elected for MCA to be claimed by
Calculate the tax liability for 2020-21 of a husband and wife (both born in 1933), using the information below. No elections have been made in relation to the MCA and none of the income is derived
Toby is a widower. He was born in August 1933. His wife was born in June 1934 but she died in March 2020. Toby's income for 2020-21 is as follows:Calculate the amount of income tax repayable to Toby
Brian and Daniel are civil partners. They were both born in 1976. Brian's total income for 2020-21 is £30,000 and Daniel's total income for the year is £10,000. None of their income is derived from
Richard was born on 5 April 1935. His wife, Patricia, was born on 7 October 1938. They were married in 1968. Their income for tax year 2020-21 is as follows:Calculate their income tax liabilities for
A married man (born 3 November 1934) died on 8 July 2020. He received a retirement pension of £14,930 between 6 April 2020 and the date of his death. His wife (born 12 August 1940) had no income
Bill was born in 1981. He is married to Hazel who was born in 1985. In 2020-21, Bill had business profits of £52,550 and received dividends of £2,200. Hazel received a salary of £220,570 and bank
(a) Bob (who is not a Scottish taxpayer) has total income of £22,445 in 2020-21. None of his income is derived from savings or dividends. During the year he makes a payment which is deductible from
Derek's total income for 2020-21 is £68,310 (entirely non-savings) and he makes a gross deductible payment of £3,000 in the year. He is not a Scottish taxpayer and he makes no Gift Aid donations or
Esmé receives dividends of £15,150 in tax year 2020-21 and has no other income for tax purposes. She makes a gross deductible payment of £100 during the year. Calculate her income tax liability
In 2020-21, a taxpayer whose marginal rate of income tax is 45% (and who pays capital gains tax at 20%) gives listed shares worth £20,000 to a charity. Disposal costs are zero and the taxpayer
In 2020-21, Owen (who is not a Scottish taxpayer) makes qualifying Gift Aid donations totalling £760. He has no capital gains tax liability for the year. Show his income tax computation if his only
Mabel has total income of £24,205 in 2020-21, none of which is derived from savings or dividends. During the year she makes a net deductible payment of £200. Show her income tax computation for the
Paul has total income of £53,890 in 2020-21, none of which is derived from savings or from dividends. During the year he pays gross eligible interest of £1,600. Show his income tax computation:(a)
Rose is single and has total income of £12,200 in 2020-21. She makes a gross deductible payment of £25 during the year. Show her income tax computation for the year and determine the amount of tax
At what rate of income tax is each of the following types of payment relieved in tax year 2020-21?(a) interest on a qualifying home loan used to buy an annuity(b) interest on a loan used to buy an
A taxpayer with no capital gains tax liability makes a qualifying Gift Aid donation of £960 in tax year 2020-21. Explain:(a) why this donation is worth more than £960 to the charity which receives
In 2020-21, Raj has dividend income of £63,400. He has no other income. He makes a qualifying Gift Aid donation of £440 during the year. Show his 2020-21 income tax computation.
Matthew (who was born on 1 October 1934) dies on 23 December 2020. His only income in tax year 2020-21 is a retirement pension of £30,860. He made a Gift Aid donation of £200 in July 2020. His wife
Pauline (born August 1972) married Adrian (born March 1973) on 17 October 2020. Their income for 2020-21 is as follows:During 2020-21, Pauline paid interest of £450 on a loan which she used to buy a
Geoffrey's income for 2020-21 comprises a salary of £114,600 and dividends received of £4,400. He makes qualifying Gift Aid donations of £7,200 during the year. Calculate his 2020-21 income tax
Ryan owns a house which he lets to a tenant. Rent is payable monthly in advance on the first day of each month. The rent was £600 per month until 1 January 2021, when it was increased to £650. All
Ursula owns a flat which was let to a tenant throughout tax year 2020-21. Rents received during the year were £10,500. Expenditure during the year was as follows:The new sofa is superior to the sofa
Sandra's entire income is derived from the letting of property. Her income and expenditure in tax years 2018-19 through to 2020-21 are as follows:Compute her net income for each year. Total rental
In tax year 2020-21, a landlord receives a premium of £36,000 when granting a 25-yearlease to a tenant. How much of this premium is chargeable to income tax?
In 2020-21, Victor rents out a room in his home and receives rents of £8,150. He incurs allowable expenses of £820. What "rent-a-room" elections (if any) should he make?
Yvonne owns four cottages, all let furnished with a view to profit. None of the cottages is ever let to the same tenant for more than 31 consecutive days. In 2020-21 the number of days each cottage
Andrew owns a house which he lets to tenants. Rent is payable quarterly in advance on 1 January, 1 April, 1 July and 1 October. The rent was £8,000 per annum until it was increased to £8,800 per
Simon owns an apartment which he lets to tenants. The apartment was let throughout tax year 2020-21 and rents received during the year were £16,640. The expenses incurred by Simon in relation to

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