Personal Tax HELP

Priti

Hi

I have my personal tax exam on Friday and I am really struggling with some questions.

If any one could please help, I would really appreciate it.

A loan of £10,000 is given to an employee on 1 may 2009. On 1 October, the employee repays £6000. The employee pays 1.5% interest on this loan. The assessable in kind in 2010/11 is £175. (i cant seem to get £175)



Ted received £3000 gross from his building society in interest for 2010/11.
Calculate the income taxe payable on this interest for 2010/11, assuming that ted’s employment income, net of personal allowance, is shown below.
Nil 356
1500 506
10000 600
35000 720

Cant get none of the answers

Any answers or help would be greats

Thanks
Priti

clegganator

For the first one you use a technique called averaging. Add the opening and closing balance of the loan together, divide by two. 10000+4000/2=7000 Then do the usual interest at HMRC's rate of 4% less what has actually been charged by company. 280-105=175 taxable!

For your question regarding Ted, see here http://forums.aat.org.uk/showthread.php?33273-help-with-personal-tax-question&p=240113 for my previous explanation.

Hope this helps!

Priti

Hi

Thank you so much for your help, it does make sense now

Thanks
Priti

bleedingBishop

105?

sorry ive panic mode myself... how do we get £105 interest paid by employee

isnt it £6000 x 1.5% = £90

BeccaLouJ9

£10,000 + £4,000 / 2 = £7,000 @ 1.5% = £105

B x

bleedingBishop

thanks. i can see its quite simple now der me eh!
exam in morning so....

BeccaLouJ9

Good Luck, mine's next week!

B x

bleedingBishop

best of luck to you too
i got a feeling im going to be posting alot on here over the next couple of hours???

BeccaLouJ9

Haha, Well if it helps, then why not!

I'm sure it will go fine, don't cram too much before though.. it may be worth finishing your study now and only looking at little bits here and there!

B x

Jo Clark

BeccaLouJ9 wrote: »

Good Luck, mine's next week!

B x

All booked in then Becca! Good luck