Madam Mary, a chartered accountant by profession and a single parent aged 61 has been a...

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Madam Mary, a chartered accountant by profession and a single parent aged 61 has been a non-resident person staying in the United Kingdom (UK) for several years. She spent the 2021 Christmas in Ghana. During the period, she met a young handsome man called Richard, also a chartered accountant by profession as a sweetheart and therefore decided to re-settle in Ghana and never returned to UK. She decided to set up her own agribusiness enterprise engaging in manufacturing and sale of fruit juice on 1st January, 2022. From her savings in UK, she transferred GBP 20,000 at a rate of GHS 6.00 to 1 GBP in December 2021 and opened a bank account for the business on 2nd January, 2022 and further purchased production machinery for the project at a cost of GBP 10,000 at a rate of GHS 15.00 to 1 GBP on 2nd January, 2022. She also brought her slightly used Range Over vehicle as part of the business assets valued GHS 70,000. Whilst in UK, she put up a house at Daban in Kumasi in 1995 at a cost of GHS 250,000. She decided to use her two adjoining garages for the project and therefore spent GHS 50,000 for that purpose from her own resources. Production and sale of the products started in late January, 2022. After a year in business, she was convinced to embark on expansion project and she started to advertise for the business in the print and electronic media. It was in the course of this that official of the Domestic Tax Revenue Division of Ghana Revenue Authority's office at Adum, Kumasi got to know of this business and invited her for discussion on her tax affairs since she had so far not paid any tax on her business income. The following facts emerged during the discussions: i) She transferred a further amount of GBP 10,000 at the rate of GHS 15.00 to GBP 1 on 2 January 2022 from her UK bank account as a working capital. ii) In February 2022, the business acquired the following assets from the GBP 20,000 transferred to the business account GHS 70,000 20,000 10,000 New Machinery 75,000 iii) In the course of the year, she purchased a Kia Trade Truck for GHS 60,000 for the business from the cash flow from the operating activities. iv) By the end of the 2022 Year of assessment some customers owed her GHS 30,000 whereas she owed an amount of GHS 25,000 in respect goods purchased but unpaid for. She was also owing GHS 3,000 in respect of electricity and water consumed for the business. 1 Distribution Van - Office Equipment Furniture & Fittings v) She caused to be transferred from UK into her business bank account, an amount equivalent to GHS 52,592, being winnings on lottery she staked before leaving UK. She has three (3) children who are still living in UK, making her stay in Ghana alone. The children are all attending Senior High Schools in UK. She lost her husband in 2015. Her private living expenses for 2022 include: Remittances to her children abroad Food Medical Bills Renovation of her building Social Activities GHS 72,000 96,000 16,000 24,000 27,000 Required Using the Net Worth Method, you are to: a) Determine her chargeable income for the 2022 Year of Assessment; and b) Compute her tax liability for the 2022 Year of Assessment Explain your computations where necessary. Madam Mary, a chartered accountant by profession and a single parent aged 61 has been a non-resident person staying in the United Kingdom (UK) for several years. She spent the 2021 Christmas in Ghana. During the period, she met a young handsome man called Richard, also a chartered accountant by profession as a sweetheart and therefore decided to re-settle in Ghana and never returned to UK. She decided to set up her own agribusiness enterprise engaging in manufacturing and sale of fruit juice on 1st January, 2022. From her savings in UK, she transferred GBP 20,000 at a rate of GHS 6.00 to 1 GBP in December 2021 and opened a bank account for the business on 2nd January, 2022 and further purchased production machinery for the project at a cost of GBP 10,000 at a rate of GHS 15.00 to 1 GBP on 2nd January, 2022. She also brought her slightly used Range Over vehicle as part of the business assets valued GHS 70,000. Whilst in UK, she put up a house at Daban in Kumasi in 1995 at a cost of GHS 250,000. She decided to use her two adjoining garages for the project and therefore spent GHS 50,000 for that purpose from her own resources. Production and sale of the products started in late January, 2022. After a year in business, she was convinced to embark on expansion project and she started to advertise for the business in the print and electronic media. It was in the course of this that official of the Domestic Tax Revenue Division of Ghana Revenue Authority's office at Adum, Kumasi got to know of this business and invited her for discussion on her tax affairs since she had so far not paid any tax on her business income. The following facts emerged during the discussions: i) She transferred a further amount of GBP 10,000 at the rate of GHS 15.00 to GBP 1 on 2 January 2022 from her UK bank account as a working capital. ii) In February 2022, the business acquired the following assets from the GBP 20,000 transferred to the business account GHS 70,000 20,000 10,000 New Machinery 75,000 iii) In the course of the year, she purchased a Kia Trade Truck for GHS 60,000 for the business from the cash flow from the operating activities. iv) By the end of the 2022 Year of assessment some customers owed her GHS 30,000 whereas she owed an amount of GHS 25,000 in respect goods purchased but unpaid for. She was also owing GHS 3,000 in respect of electricity and water consumed for the business. 1 Distribution Van - Office Equipment Furniture & Fittings v) She caused to be transferred from UK into her business bank account, an amount equivalent to GHS 52,592, being winnings on lottery she staked before leaving UK. She has three (3) children who are still living in UK, making her stay in Ghana alone. The children are all attending Senior High Schools in UK. She lost her husband in 2015. Her private living expenses for 2022 include: Remittances to her children abroad Food Medical Bills Renovation of her building Social Activities GHS 72,000 96,000 16,000 24,000 27,000 Required Using the Net Worth Method, you are to: a) Determine her chargeable income for the 2022 Year of Assessment; and b) Compute her tax liability for the 2022 Year of Assessment Explain your computations where necessary.

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ANSWER To determine Madam Marys chargeable income for the 2022 Year of Assessment using the Net Wort... View the full answer